Sharjah closes all ENOC fuel stations amid dispute

Sharjah Economic Development Department carries out threat as deadline to solve crisis passes
Sharjah closes all ENOC fuel stations amid dispute
By Andy Sambidge
Fri 24 Jun 2011 07:24 PM

The Sharjah Economic Development Department (SEDD) has shut down all Emirates National Oil Company (ENOC) petrol stations in the emirate in an ongoing dispute over fuel shortages.

A 72-hour deadline given to the ENOC group by the Sharjah Executive Council to open petrol stations across the emirate expired on Friday without compliance by the group.

A “lack of responsiveness” from the ENOC group prompted the SEDD to close their petrol stations, Osama Samra, director of the Sharjah Media Center, told UAE daily Gulf News.

At more than 30 stations in areas including Al Nahda, Al Khan, Kalba and Khorfakhan, ENOC Group staff put up barriers blocking cars from entering forecourts, added Abu Dhabi-based The National.

A fuel shortage crisis led to 82 Enoc-owned filling stations in Sharjah, Ajman, Umm Al Qaiwain, Ras Al Khaimah and Fujairah, halting operations for a month.

Abu Dhabi National Oil Company (ADNOC) was this week ordered to “help solve” the fuel shortage at Sharjah petrol stations owned by its rival retailer.

The UAE’s third shortage in 10 months was initially blamed on maintenance at petrol stations owned by ENOC and its unit EPPCO, an explanation rejected by Sharjah’s Executive Council.

Analysts say the problem lies in government subsidies, which look increasingly unsustainable as soaring oil prices drive up the cost of supplying fuel to customers at a cheaper, fixed price.

ENOC and rival state-owned retailer Emarat have suffered because they buy fuel at market prices and sell it at government-set rates. Enoc said in May it would have to meet an additional AED2.7bn ($735.3m) in 2011 to cover the cost of providing subsidised fuel.

Three of the UAE's four fuel retailers - ENOC, EPPCO and federally-owned Emarat - have been making losses for years.

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