By Andy Sambidge
Sharjah Economic Development Department carries out threat as deadline to solve crisis passes
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 ($735.3m) in 2011 to cover the cost of providing subsidised fuel.
Three of the UAE's four fuel retailers - ENOC, EPPCO and federally-owned Emarat - have been making losses for years.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Great step forward. Now their are 82 fewer petrol stations in Sharjah. I wonder if they will shut down SEWA who obviously use the same PR company?
The stations were closed anyway, so what is the point?
I don't see how this action will help solve the issue.
SEDD shuts down gas stations that have no gas to begin with. Very effective, I guess the problem will be solved now.
I truly Agree that SEDD should take action against SEWA
They were still operating their connivence store, the only income source as per ENOC and Emarat, since they are losing on every gallon sold...
so yes, effective to some extend
Shut down is not a salutation, but the problem is politics , have any body think about welfare of the ( workers) . think about family of the workers , but who care ???
What kind of message that decision sends to business investors coming to UAE? Your business can be closed in a mater of days.... I will reconsider for sure my trade license renewal.
Does the fact that ENOC is a Dubai quasi government company and it has been closed down by the Sharjah Authorities mean that its commercial licences will be withdrawn or cancelled in terms of operating in Sharjah?
Selling fuel at less than cost just won't work, Dubai firms's cannot afford to subsidise a US$ 2.7 billion loss given the current debt levels and fragile economic climate.
ENOC and EPPCO's customer service has become really bad compared to Emarat and ADNOC and petrol here is now the highest in the GCC so they should stop complaining or make way for professional companies who won't turn on their consumers when they can't make enough money (obviously no company loses money for decades and stays open unless there's another side to the story). I for one support the Ruler's response 100%.
Yes there is another side that has been broadly discussed but you seem to be oblivious to. You may support as much as you like, but I am really interested in knowing how you plan to"professionally manage" to make up in volume when you sell below cost.
And yes, I get that you like your petrol cheap, it would be good to distinguish between the things we like and the things that make sense.