By Andy Sambidge
Sharjah Executive Council demands answers from ENOC Group after closure of many petrol stations
The Sharjah Executive Council (SEC) on Wednesday demanded an immediate end to the fuel shortages in the emirate.
It also called on the Emirates National Oil Company (ENOC) Group to explain the reasons which led to the closure of many of its petrol stations.
In recommendations issued after a meeting to discuss the fuel crisis, the SEC said it wanted answers from ENOC group, the parent company of retailers EPPCO and ENOC, within 48 hours.
"The recommendations were issued out of the SEC's keenness to provide consumers with their daily demands, and petrol is one of these basic needs," SEC said in a statement carried by state news agency WAM on Wednesday.
"The SEC General Secretariat is waiting for ENOC's response about the real reasons behind the fuel disruption so as to facilitate looking into proper solutions which can return the situation to normalcy and spare the consumers the pain of fuel supply disruption which started since late May and continues up to today," the SEC statement added.
It said ENOC had claimed the two-week disruption was due to ongoing maintenance which has kept about 82 petrol stations out of action in Sharjah, Ajman, Ras Al Khaimah and Fujairah.
Earlier on Wednesday, analysts said fuel shortages that have left petrol pumps dry at stations across the UAE were likely the result of $100 oil squeezing state-owned retailers.
The UAE, the world's third largest exporter of crude oil, has long subsidised fuel prices in an effort to cut living costs for residents, a move that costs the state millions of dollars a year.
ENOC and rival state-owned retailer Emarat have suffered from rising oil prices because they buy fuel at market prices and sell it at government-set rates.
In April, ENOC said it expected to spend AED2.7bn ($735m) this year on providing fuel subsidies. The figure represents a 44 percent rise from the AED1.5bn it spent in 2010.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.
this problem has been addressed many times in the UAE and the best solution was to free the petrol prices at the pump to float with the international oil prices . At the same time increase the salary of all employees earning below 20,000 dhs per month by an average transportation cost which is a round 600 dhs per month . It is reasonable not to give the hihgly paid employees as they are self supported and could easily coo with the new hike .
By doing this the government will save around 500 millions dhs ever month , which much lower that what it would have paid on the salar increase . The new floated prices will make people appreciate the value of energy and reduce waist , as many individual drivers with large cars ( 7 seaters ) go to work using such a gas drinker and polute the enviroment , just because they can afoard it now . Evbery one will think well about the cost of driving and roads will be less crowded ,,,, good news for many and for RTA .
Happy working >>
The whole social model is built around subsidies here. It will take lot of time to clean it, not sure even the political will is there.
Being 3rd largest exporter of oil in the world we are expensive then other gulf countries and within emirates Dubai is expensive than Abu Dhabi and fuel stns operated by them. Common people may not be aware of the commercial issues hence in the best interest of the authorities they shud inform the general public about the same so that there is no negative feelings.
When the fuel price shot to $140 then too the retail rate was not increased but at $100 the operators are finding it difficult!!
Subsidize petrol rates leads to abuse of same and does not add value to the economy nor to the environment. With rise in petrol price more and more people will opt for public transport at least once in a while if not on daily basis and that will certainly make some difference in civil society. If possible the goverment shud subsidize Diesel rate as the same affects the cost of movement of goods and services which directly affects every families budget.
USE NATURAL RESOURCES WISELY.
You do realize how difficult it will be for government to "increase salaries of all employees" ?
If there ever is an increase in private sector, people earning 50k or more will ask for 5k more every month, while people earning below 10k will not get a single dirham increase.
And petrol costs are not just your car fuel costs that you can cap it at 600 dhs, it affects everything.
And most people who can afford gas guzzlers now, will be able to afford it later as well.
The fact you overlooked makes me question that you are really an "Energy Expert"
You have got to be one of the worst and most illogical 'energy experts' out there.
What exactly is wrong with subsidies given to citizens? Governments should take care of their people (western so-called democracies should take note of this). If the country is rich, why let foreign entities take out all these riches and give peanuts in royalties, when the government should be the one to sell the output of such resources and use the revenue to keep the people happy? What exactly is wrong with this model?
Driving on Emirates Road this morning from Ajman to Sharjah I stopped at an Enoc which had petrol. The attendant said he could only give me AED 50 worth of petrol. Now petrol stations are rationing? This is bad. This is also putting the UAE in a bad light yet again. My family in the UK rang yesterday because the story has now become world news....
@Mike: In one word... Sustainability
In two 2 words: Umm, what?
What does sustainability have to do with this? How exactly does sustanaibility fit in with the concept of a government taking care of its own employees?
Tell me who will care more about a country's natural resources: the government, or some private business whose inherent purpose for existence is to turn and maximize a profit??
@Mike, subsidies have many things wrong. They distort consumption, they lead to overconsumption and foster economic inefficiencies as the pressure to become more efficient gets reduced.
They are not sustainable in the economic sense (at some point all governments have run out of cash). You seem to believe that subsides cost nothing, well guess what, the money you spend protecting an inefficient activity (driving gas guzzling cars in this case) could be put to better use.
A far more effective approach is to provide households or individuals with cash handouts that are revenue neutral.
And about the "western so called democracies", I doubt AB will allow me to give you an answer about how subsidies and other tools are used for political goals.