The United Arab Emirates, the third-biggest OPEC producer, will link gasoline and diesel prices to global oil markets starting next month, becoming the first country in the oil-rich Persian Gulf to remove transport fuel subsidies.

Fuel prices will be deregulated as of Aug. 1, the Ministry of Energy said in a statement on Wednesday. Diesel prices will also be linked to global markets, and are initially expected to decline, it said. Prices for both fuels will be announced on the 28th day of each month, the ministry said.

Gasoline is now subsidized in the U.A.E., the second-biggest Arab economy and home to about 6 percent of the world’s oil reserves. Unleaded gasoline 98 octane in the U.A.E. sells for 1.83 dirhams (50 cents) a liter, according to prices on the ministry’s website. The U.S. price of premium unleaded gasoline is $3.18 a gallon, or 84 cents a liter, according to AAA, the biggest U.S. auto group. That compares with 16 cents in Saudi Arabia, the largest OPEC producer.

“There was no reason to subsidize in a country that is as rich as the U.A.E.,” said Nasser Saidi, former chief economist at Dubai International Financial Centre and head of Nasser Saidi and Associates. “All manufacturing and industry which is highly energy intensive will need to adjust. People will now have to think twice before buying gas guzzling cars.”