High salaries and low petrol prices means that a trip to pumps in Qatar takes a smaller bite out of motorists’ wallets than nearly anywhere else in the world, according to a recently released survey.
Fuel prices in Qatar are heavily subsidized by the government, with retail prices frozen at QR1 (US$0.27) for a liter of “super” and QR0.85 ($0.23) for a liter of “premium” petrol. That’s among the lowest prices on the planet and puts Qatar more or less in the middle of GCC countries. Petrol is cheaper than in the UAE, where it costs the equivalent of approximately $0.47 per liter, but more expensive than the $0.16 paid by motorists in Saudi Arabia.
But when compared to average salary of Qatar residents, local petrol prices are the most affordable among 19 countries surveyed by the vehicle sales website Carmudi.
The company said a liter of petrol in Qatar costs an average of 0.07 percent of a resident’s average daily salary. That’s less than the 0.1 percent in Saudi Arabia and 0.28 percent in the UAE.
At the other end of the scale, the average Congo resident can work an entire day and still not make enough money to purchase a single liter of petrol. According to Carmudi, pump prices in the African country average the equivalent of $1.51 a liter, outstripped the average daily earnings of $1.34.
Subsidy reforms
While energy and fuel subsidies are beloved by most Gulf residents, economists frequently deride them as an inefficient way of using the region’s natural resources wealth to enrich the lives of citizens. Subsidies are also criticized for being a drag on government finances and encouraging the over-consumption of water, electricity and fuel.
That causes environmentalists to cringe, but delights some motoring enthusiasts.
“Fuel prices in the oil-wealthy Middle East … (make) it the best place to own a gas guzzler,” Carmudi said in its report, according to Gulf News.
Even when oil prices were high and governments in the region were flush with cash, ministers in Oman and the UAE spoke about the need to cut subsidies in the GCC.
“You will never have a strong economy if you are subsidizing,” UAE Energy Minister Suhail Al Mazrouei told reporters in June 2014, according to Bloomberg. “In consumption of electricity, we are two to three times the global average, and we are not happy about that level.”
Last year’s collapse in oil prices renewed calls by the International Monetary Fund for the countries in the GCC and broader Middle East and North Africa region to reform their subsidy schemes.
However, little action appears to have materialized. Bahrain, which has been among the countries hit hardest by lower prices, said in May that it would cut subsidies for expats but did not give any timeline for implementing reforms, Reuters reported.
The newswire quoted a government minister as saying that the Gulf state planned to allow prices to rise and would give cash payments directly to Bahraini citizens, but not foreigners living in the country.
In 2014, Qatar raised diesel prices for the first time in three years by raising the price from QR1/liter to QR1.5 for local companies, and QR1.8/liter for joint ventures.
However, the move was interpreted by some as an attempt to reduce the volume of fuel smuggling out of the country, rather than an effort to reduce subsidies.
Thoughts?
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This is one of the best things in Qatar! You never have to worry about filling up your car or cutting down your number of journeys. However it will not last. If gas prices stay low the subsidising of petrol at this level cannot continue for ever. Inevitable it will rise soon but it’ll still be cheap.
They can cut subsidies for expats and leave them for locals, for example by doubling the price and offering locals a petrol allowance to cover for the increase.
Just full of helpful ideas!
Haha just wait for it it will happen for sure if oil prices go under 60USD for one more year 🙂 :p
Then we would just get a raise in our transport allowance.
If you work in the government, forget it. If you are in the private you must have a really nice employer to give you a raise in your allowance.
No, we just have a very special skill set. I work for the government.
Qatar the Welfare State.
You do know that the lower price of oil, means the less subsidy cost given by the government, right?
And you know that your suggestion will actually be more difficult and prone to abuse than ever right?
And you know that instead of this convoluted process, the Government can just add tax in expat remittances?
Just asking.
petrol at below cost price in a country with a shameful level of pollution and one of the worst carbon footprints is in itself a statement of contempt for the image of Qatar in other’s eyes ….
Petrol is cheap, but the cost of vehicle maintenance is very expensive.
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This is what I look to Doha News for: cutting edge investigative journalism. In other news:
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Absolutely true. DN has about 5 topics (FIFA, Weekend activities, Traffic and related, or Others) Others being anything that can spark a wasted discussion on clash of cultures.. Good job DN! Maybe DN can bring some proper political analysis of the gulf region incl Qatar’s stand, or how about the situation in Yemen? But ohh no.. “Look everybody, more deaths on the roads..” now start nagging about LC and the police.
Really DN is there nothing else going on in Doha ? This is really scraping the barrel …. Why don’t you close up for the summer ?
If I’ve done my sums right, 1QAR at 0.07% works out at an average daily salary of 1,429QAR. That’s ~42k a month which would suggest rather a lot of people here must be getting mega money to balance out the hundreds of thousands of people making far less than that.
I guess it could mean working days, in which case that drops a third to 28.6k /m.