Saturday, Jun 25, 2011
Gulf News
Dubai The Sharjah Economic Development Department (SEDD) has shut down all petrol stations under the Enoc Group in the emirate after they failed to comply with government demands to resume their services, a senior Sharjah government official told Gulf News.
A “lack of responsiveness” from the Enoc group prompted the SEDD to close their petrol stations, Osama Samra, Director of the Sharjah Media Centre, the official communication centre for the Sharjah Government, told Gulf News.
The 72-hour deadline given to Enoc by the Sharjah Executive Council to open petrol stations across the emirate expired yesterday without compliance by the group.
The Sharjah government is expected to decide on the future course of action against Emirates National Oil Company (Enoc) and its subsidiary Emirates Petroleum Products Company (Eppco), a senior Sharjah government official said.
“The future course of action will be discussed at the next meeting of the Sharjah Executive Council on Tuesday,” he said.
“There will be action taken. The aim of the SEDD and Council is the well-being of citizens and residents. You cannot cut the supply of petrol to residents, citizens and tourists. It’s a necessity like bread, so the government had to take action to protect the rights of the consumer,” Samra said.
Enoc officials have remained silent on the development despite several attempts to contact them.
Enoc, a Dubai Government’s energy undertaking, has been supplying fuel in Dubai, Sharjah, Ajman, Fujairah, Umm Al Quwain and Ras Al Khaimah. It does not have any operations in Abu Dhabi — a market served solely by Abu Dhabi National Oil Company (Adnoc) Distribution, an Abu Dhabi government entity and part of Adnoc. Although Dubai exports limited quantity of crude, its gasoline retailer Enoc and Eppco purchase refined crude from the international markets at international prices.
Mounting losses
However, retail gasoline prices are controlled by the UAE federal government and all the three retailers, Adnoc, Emarat and Enoc/Eppco are bound to follow the government’s pricing policy guidelines. With crude prices skyrocketing in recent months, the gasoline retailers are forced to concede losses and depend on government subsidies.
Gulf News earlier reported that the three gasoline retailers were making a daily loss of Dh16.5 million per day when benchmark Brent crude price flirted around $120 per barrel.
This translates into an annual loss of Dh6.02 billion, when compared to the global crude price at $120 per barrel against the current domestic gasoline price. The current domestic price of petrol reflects international crude oil prices at about $55 a barrel.
The petrol grade which sells at Dh1.72 a litre in the UAE must be sold close to Dh3.10 a litre to reflect its true market price. As matters stand, the oil retailers are losing around Dh6.50 for every gallon of petrol sold.
By Saifur Rahman ?Business Editor ?and Deena Kamel Yousef?Staff Reporter
Gulf News 2011. All rights reserved.
