Tuesday, June 28, 2011

Fuel shortages in the UAE?

Since the UAE is the world’s third largest crude oil exporter, I always assumed I’d never face issues such as hikes in gasoline prices or fuel shortage while living here. Unfortunately, recent developments show that things are not as simple as they seem to be…

For the third time during the past ten months, UAE residents are frustrated as they face fuel shortages. The recent chaotic situation has forced many drivers to waste precious time waiting in long lines for fuel, while others were literally left stranded by the side of the roads without gas.  

Fuel shortages have led ENOC, one of UAE’s main oil retailers, to completely shutdown petrol stations – a total of 82 in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah (five out of seven Emirates).

Why is this happening here? Well, let me see if I can simplify this as best as I can…

Basically, the main issue is that while Abu Dhabi produces and refines its own crude, Dubai oil retailers buy petrol at international market price and then need to sell it at prices imposed by the local government. Surely enough this has come at a high cost to companies, such as ENOC and EPPCO.

According to specialists, there are two ways out of this mess. One option is for the Abu Dhabi government to step in and ‘pay’ ENOC’s bill. A second possibility is to free pump prices of petrol so retailers can ask what they want – to expats, that is, since, rumor has it, Emiratis will be entitled to free gas.

In Abu Dhabi the situation seems to be under control. I just hope it remains that way. It’s so good to be able to pay only 20 bucks (USD) to fill up my tank!

More info:

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