UAE Cut Down Fuel Subsidies to Strengthen Finances and Trim Green House Gas Emissions
United Arab Emirates accounts for one of the biggest greenhouse gas emitting countries in the world. To check the emissions and to control the fast increasing number of vehicles, the UAE is going to cut its petrol subsidies that are worth billions of dollars. This move will also help in strengthening the finances of the Gulf nations.
The Gulf economies have also come under IMF's (International Monetary Fund) pressure to cut down fuel subsidies. The IMF says that in the UAE the petroleum subsidies account for $7billion per year. It is a part of the energy subsidies package which total to $29billon or 6.6 percent of the gross domestic product.
The budgets of oil dependant countries have faced the pressure dueto the drop in oil prices which slid from greater than $100 per barrel noted one year back to its present level floating around $55 a barrel.
To have a properly balanced budget, UAE will require oil prices to be near about $75 per barrel.
Others in the Gulf like Oman and Bahrain which have a smaller reserve compared to UAE are reliant on oil prices which exceeds $100 per barrel to balance their budget.
On Wednesday, UAE said that a committee chaired by Matar al-Neyadi appointed by the government would set the price of petrol that is harmonious to global oil price benchmarks starting from the coming month.
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