Dubai's Emirates National Oil Co says report 'baseless'; continuing to hold talks to resolve fuel crisis
Dubai's Emirates National Oil Co (ENOC) dismissed a newspaper report as "baseless" that the UAE planned to cancel its petrol station licences in the northern emirates and bring in another operator.
Gulf News, citing sources in the oil sector, said on Tuesday the federal government planned to allow Abu Dhabi National Oil Company (ADNOC) to take over the stations from ENOC and its arm Emirates Petroleum Products Co (EPPCO) after a fuel shortage that has lasted for over a month.
"ENOC reiterates that there has been no expression of interest by any organisation on taking over the operations of the company's retail outlets," the company said in a statement.
The fuel shortage hit the northern emirate of Sharjah, with ENOC and EPPCO petrol stations running dry for weeks before being shut down by Sharjah's government two weeks ago.
The shortage, the third in the past 10 months, came after ENOC and EPPCO, both operating at a loss due to federal fuel subsidies, refused to supply Sharjah, industry sources and analysts have said.
"The concerned authorities are actively discussing the matter of fuel distribution in the northern emirates," ENOC said in its statement.
ADNOC officials were not immediately available to comment.
The report said EPPCO and ENOC were pressing the government to allow an increase in fuel prices and had told authorities the cap was leading to massive losses amid rising global oil prices.
Gasoline is heavily subsidised in the UAE, a member of OPEC and the world's third-largest crude exporter. Prices have been raised by 26 percent since April 2010 as part of a plan to phase out subsidies, but that plan is on hold, analysts say, given the popular unrest sweeping the Arab world.
The UAE has so far avoided the protests seen in many Arab states this year. It has taken a series of measures to calm potential social tensions, including a $1.6 billion plan to improve infrastructure in five northern emirates, which have benefited less from the country's oil wealth.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Selling gasoline is only at a loss when compared to world prices. With the cost of production of crude at only about 10% of world prices the only other cost is refining. Perhaps they buy gasoline and sell it at a loss after selling crude at a huge profit. Net result should still be a big profit!