Sharjah gives ENOC 72 hours to solve petrol shortage

More than 80 Enoc filing stations have halted operations after month-long fuel shortfall
Sharjah gives ENOC 72 hours to solve petrol shortage
Enoc and Eppco stations in Sharjah have seen a month of petrol shortages
By Andy Sambidge
Wed 22 Jun 2011 08:51 PM

The Sharjah Executive Council (SEC) has given oil firm Enoc Group 72 hours to resume operations across the emirate of face the potential closures of its filling stations.

The Dubai-owned company has until June 24 to comply and restore service at all its petrol stations, state news agency WAM said Wednesday, or the Sharjah Department of Economic Development is mandated to take all necessary action, including closing down Enoc and Eppco outlets.

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.

State news agency WAM said Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, had directed the emirate’s fuel retailer to step in over the petrol shortfall, which has also spread to other northern emirates such as Umm al Quwain.

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.

The council earlier this month called for an immediate end to the fuel shortages and demanded Dubai-owned Enoc explain the “real reasons” for the shortfall.

But 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 energy and oil 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.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.