ADNOC set to take over petrol stations in northern emirates

Government is expected to cancel licenses in move which could extend to other stations across UAE
By Claire Ferris-Lay
Tue 05 Jul 2011 12:25 PM

Abu
Dhabi National Oil Company is set to take over the management of EPPCO and ENOC
petrol stations in the northern emirates following months of fuel shortages, it
has been reported.

The
UAE government is expected to cancel EPPCO and ENOC’s licenses and allow ADNOC
to take over in a move that could also be extended to include service stations
across the other emirates, Gulf News said on Tuesday quoting an unnamed source.

The
UAE has been facing a fuel shortage, which has spread from the northern
emirates to Dubai. The shortfall, which the company blamed on filling station
upgrades, was likely a reflection of the gap between fuel prices and the
heavily subsidised cost at the pump, analysts have said.

ENOC
and rival retailer Emarat have suffered from rising oil prices because they buy
fuel at market prices and sell it at government-set rates. The UAE has long
subsidised fuel prices in an effort to cut living costs for residents, at a
cost of millions of dollars each year

“It
is more likely due to a shortage of funds,” said Samuel Ciszuk, energy analyst
at IHS Global Insight. “This is quite a common problem in a system where the
retail price is fixed and where the main entity is an importer of fuel or
feedstock.”

EPPCO
and ENOC are also said to be lobbying the government in a bid to increase fuel
prices and are thought to have released significant losses for the first half
of the year, a government source told Gulf News.

ADNOC
officials were not immediately available for comment when contacted by Arabian
Business.

 

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