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Dearer by the day

Dearer by the day

Life in the Emirates may be tax free, but it sure is getting more expensive by the day. Kipp explores the rising cost of living in the UAE.

January 17, 2011 2:46 by

The economic slowdown may have meant redundancies, severe debt, and companies going bust, but if you managed to hold on to your job the recession also meant cheaper rents and some of the best sales Kipp’s seen in a while. Two years on, however, as the price of oil climbs and the tolls of the recession catch up with all sectors, the cost of living is on the rise here in the UAE.

Yep, believe it or not, these are gloomy days we are living in. Unconvinced? Think things are picking up in the Emirates? Think Kipp’s being its usual miserable self? Well, maybe we are – but by way of explanation we bring you the tripod of instability: the three telling signs life is getting a whole lot more expensive in the UAE.

Exhibit A: The taxi fares increase. The RTA has announced that, starting this week (Friday, we think), taxi prices in the UAE will increase by 6.8 percent to offset rising fuel prices. Though the rise will not affect the starting price of every journey, the increase comes after the RTA received repeated complaints from taxi franchises about the rising petrol costs. Following a 15 fils per litre rise in April, fuel became 20 fils more expensive in August – barely three months later. Rising fuel costs have also been at the heart of the unprecedented number of taxi-strikes the Emirates witnessed at the end of last year, as drivers struggle to make a living.

Exhibit B: The tea prices increase. “There’s nothing a cup of tea won’t fix…but its price!” reads the lead of this Emirates 24|7 story, which reports that tea prices in local cafeteria’s have increased by almost 100 percent. Tea prices in the UAE, which had been fixed at a steady 50 fils for over 28 years, received their first increase in November 2004, when over 6,000 cafeterias across the Emirates increased prices to Dh1. The current increase lacks the uniformity of the 2004 hike, with some cafeteria’s increasing prices to Dh2 and others to Dh2.50. Although still a low priced good, it’s a big indicator when such a basic staple is marked up heavily.

Exhibit C: The Coca-Cola and Pepsi prices increase. Before the year ended, fizzy drink giants Coca-Cola and Pepsi announced they were hiking prices as much as 50 percent. Well, actually, they didn’t announce it. They tried to slip it through, until disgruntled customers alerted the media. In its letter to customers Coca-Cola said, “The current economic situation and ever increasing manufacturing, selling and distribution costs have significantly impacted our business.” Once again, the rises were not big money (50 fils on a can), but when you think that represents a 50 percent increase, you get a better idea of scale.

From the basics up, things are getting pricier here in the UAE. Let’s hope the property prices keep dropping to compensate.

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1 Comment

  1. mayssa on January 18, 2011 12:50 pm

    what about SALIK! thats a road tax!

    no matter what they say: we are paying taxes indirectly here!

    we are also paying 5% housing fee: call it what you may but thats a tax!

    and generally, goods in dubai are more expensive than London!! cant help but think there’s an indirect tax on trade that isnt neccessarly made common knowledge


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