The cost of petrol will increase by 10 dirhams a liter next month, the Ministry of Energy and Industry has announced.

This marks the first noticeable increase since the government announced in April that it would set fuel prices monthly to reflect changes in global energy markets.

Starting in July, a liter of 91-octane premium petrol will cost QR1.30, up from QR1.20. And Super 95-octane gasoline will increase from QR1.30 to QR1.40 per liter.

Diesel prices will remain unchanged at QR1.40 per liter.

Changing habits

Once the new prices take effect, motorists will be paying between 40 and 52 percent more to fill up than at the start of the year.

Gasoline has historically been heavily subsidized here, but that policy has created “undesirable economic and environmental effects,” the government said in April.

For example, petrol-guzzling SUVs are a common sight in Qatar. Requiring motorists to pay more for petrol could spur them to use fuel more efficiently, authorities previously said.

The fuel increases, which started with a big hike in January, come as Qatar prepares to run its first budget deficit in 15 years.

Higher rates at the pumps are also helping to add more than QR700 million annually to government coffers, a move that’s already garnered praise from agencies that are monitoring how Qatar grapples with lower oil prices.

However, the prices are also expected to fuel inflation in a country already known for its relatively high cost of living.

Thoughts?