UAE's Emarat to cut deals after losing fuel stations

UAE fuel retailer Emarat plans to cut its gasoline purchases nearly in half next year after transferring some of its pump stations in the northern emirates to Abu Dhabi National Oil Company, industry sources said.

Emarat will likely cut its gasoline requirements to about 600,000 to 700,000 tonnes next year from 1.2 million tonnes this year, one of the sources close to the matter said.

"This will reduce Emarat's losses by about 40 percent," the source said.

Emarat and ADNOC signed an initial agreement in May last year for ADNOC to take over Emarat pump stations in the poorer emirates of Sharjah, Umm Al Quwain, Fujairah and Ras Al Khaimah.

Gulf Arab countries heavily subsidize fuels as a social benefit, but this leaves fuel retailers not linked to large oil producers like ADNOC taking billion dollar losses selling gasoline at well below their acquisition cost.

Emarat's reduced gasoline purchases may have minimal impact in the short term as ADNOC will likely need to fill the shortfall by importing the oil product instead, traders said.

But once Abu Dhabi Oil Refining Company (TAKREER) completes expansion of the Ruwais complex, the UAE's biggest refinery with a capacity of 415,000 barrels per day (bpd), towards the end of next year, gasoline imports will likely fall, they added.

The UAE is set to become self sufficient in gasoline by the end of 2014 with the Ruwais expansion.

ADNOC currently imports about 75,000 to 90,000 tonnes a month of gasoline while Emarat imports about 50,000 to 60,000 tonnes a month, buying the rest from the domestic market, traders said.

Emarat's jet fuel purchases for next year are likely to remain steady or slightly higher than this year's 850,000 tonnes, the first source said.

It will likely not have much gasoil to import next year as its main gasoil client - the Federal Electricity and Water Authority - is using more natural gas, the source added.

This reduced requirement caused Emarat to re-sell 15,000 tonnes of gasoil it had bought from ADNOCto another company in October, the source said.

Emarat imported about 7 cargoes of gasoil this year as part of fuel donations to Egypt, traders said.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Retail renaissance in Saudi Arabia

Retail renaissance in Saudi Arabia

The largest economy in the GCC is emerging as a lucrative retail...

In the lap of luxury: Ermenegildo Zegna's UAE ambitions

In the lap of luxury: Ermenegildo Zegna's UAE ambitions

Ermenegildo Zegna and Al Tayer Group are both respected family...

Focus: The impact of the Bahrain food subsidies row, what it means for the wider region

Focus: The impact of the Bahrain food subsidies row, what it means for the wider region

Sources also claim at least half the butchers in the island state...

Most Discussed