Dubai: An expected increase in crude oil prices over the next four months will rise up the prices of gasoline and basic foods but the continuing drop in rents should ease the burden on consumers' wallets, economic analysts say.
The value price of gasoline is expected to rise up to 15 per cent within the next three to four months as crude oil is anticipated to reach $110 (Dh404) to $120 per barrel, said Sajith Kumar, chief executive and director at JRG International Brokerage DMCC. Current prices are around $90 a barrel, he said.
The prices of essential food items like grains and vegetables may rise up to 30 per cent in the UAE as energy and utilities costs pressure producers while global commodities prices rise to new highs in 2011, analysts say.
Food production is a very intensive process. The rice you see in a bag goes through a lot of stages. If oil prices go up, it's going to be seen in prices of goods you buy. If the good is a necessity and there's not substitute for it, producers can pass that extra cost onto the consumers. You're just stuck with it," said Dalton Garis, an Associate Professor of Economics and petroleum market behaviour at the Petroleum Institute, Abu Dhabi.