Fuel prices in Qatar will increase in March for the fifth straight month, the Ministry of Energy and Industry has announced.

Starting on Wednesday (March 1), the cost of 91-octane, premium grade fuel will be QR1.60/liter, up 5 dirhams from current prices.

The cost of 95-octane super gasoline will also go up by 5 dirhams to QR1.70/liter. And diesel will see a 5-dirham increase to 1.55/liter.

Qatar first began pegging fuel prices to the global market last June.

Since then, prices have increased more than 30 percent for petrol (taking March into account). Diesel is also seeing a 10 percent jump.

Reduced subsidies

The rising fuel prices come as Qatar contends with an expected budget deficit of QR28.3 billion ($7.8 billion) this year.

Acknowledging the new reality of lower oil prices, the government has been reducing subsidies on fuel and also utilities such as electricity and water.

Plans are also afoot to introduce a new “selective tax” on junk food and luxury goods this year, and a value-added tax next year to boost revenue.

For residents, higher fuel costs have so far been offset by falling prices of food, according to the monthly Consumer Price Index.

But it is unclear how long inflation will remain low once the new taxes are imposed.

Thoughts?