Why fuel price rises are a good thing

Posted on Jul 13, 2010 by

Fuel is going to cost more in the Middle East in the future, so get used to it

Although motorists will doubtlessly be annoyed by the latest rise in fuel prices, it’s hard to complain about it.

The Middle East has some of the cheapest fuel in the world. Even after the latest increase this week, a litre of special petrol will cost just 1.72AED. Compare that to the US, where the same amount would cost 2.63 AED, or the UK where it costs 6.48AED at the time of writing.

The Middle East has long lived in a bubble where the price of fuel has been artificially held stable and cheap by government subsidies. When was the last time you really paid any attention to the price you paid to fill your car up?

But with the world increasingly looking at ways of conserving a dwindling oil supply and reducing polluting emissions from vehicles, it’s about time that the Middle East, with its fondness for big, fuel guzzling SUVs, moved with the times.

Don't be surprised to see more badges like this on cars arriving in the Middle East

High fuel prices in the Western world have driven customers towards smaller-engined, more fuel-efficient cars. It wasn’t a popular revolution, but relying on the public’s goodwill won’t work – hitting them in the wallet is the only surefire way to make consumers change their habits. It might take longer for the same shift in consumer mindset to take hold here, but it’ll happen, driven by the global automotive industry as well as governments in the region.

The Middle East is not going to give up its love affair with 4x4s any time soon, which is why many manufacturers that sell here are focused on increasing engine efficiency and in many cases downsizing engine size in their SUVs.

Like it or not, the days of 6.0-litre V8s are numbered – in the future, expect more turbocharged and supercharged versions of smaller capacity motors that will still give decent power but drink far less fuel. Expect to see more hybrid vehicles that use new technology to reduce environmental impact and make your money spent at the fuel station to go further.

Expect also to see more smaller cars on the roads of the Middle East. As fuel costs rise, consumers will be forced to evaluate whether they really need that massive SUV, or whether something more frugal would suffice.

No one wants to start paying more for something that was previously cheaper, but as far as fuel costs go, further rises are inevitable and, looking at the bigger picture, necessary.

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