Drivers in the U.S. oil hub of Houston can fill their tanks for less than the cost in Abu Dhabi and Dubai for the first time since 2008 as falling crude prices push Middle East exporters to cut government fuel subsidies.
The price of the cheapest grade in the United Arab Emirates, of which Abu Dhabi is the capital, is 1.51 dirhams per liter ($1.55 a gallon) for January, according to the country’s Ministry of Energy. That compares with $1.32 a gallon for the lowest regular fuel in Houston, data compiled by GasBuddy.com show. Houston drivers haven’t paid less on average than Abu Dhabi pump prices since 2008, according to the data. Dubai is the second-largest emirate in the U.A.E. which has the same fuel prices nationwide.
Benchmark Brent crude prices have dropped 16 percent this year after declining in each of the past three years. That’s cutting pump prices for drivers across the U.S., while having the opposite effect in Persian Gulf countries, which supply about a fifth of the world’s oil. Saudi Arabia, the U.A.E., Qatar, Oman and Bahrain have reduced or eliminated fuel subsidies over the past six months.
The U.A.E. pumped 2.94 million barrels a day last month, according to data compiled by Bloomberg. Texas produced 3.5 million barrels a day in October, according to the latest available data from the U.S. Energy Information Administration.