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Petrol remains scarce, hard drive in Sharjah

By Allan Jacob & Lily Libo-on SHARJAH - Sharjah's summer of motoring discontent simmers with petrol stations running dry for the fourth week in a row.

All of oil retailer Enoc 's petrol stations in the emirate were closed from Friday after the company failed to meet a 72-hour deadline set by the Sharjah Executive Council. But that's no respite for the average customer whose problems have spiralled with no sign of return to normalcy, though the Abu Dhabi National Oil Company ( Adnoc ) is stepping up supply to meet the shortfall.

Officials are counting on the power of silence as anguished motorists replenish their tanks from pumps in neighbouring emirates. Closure signs at Enoc and Eppco stations turned away many motorists on Monday, but no long queues were seen at Emarat and Adnoc pumps.

The only saving grace amid the stalemate is the thinning traffic due to school holidays and many families going on vacation.

Mohammed Saleh, a resident near Al Nahda, said he found it easier to fill petrol when he returns from his workplace in Dubai. "This helps reduce the number of motorists queuing up at Adnoc and Emarat petrol stations in Sharjah. I fill my tank in Al Qusais in Dubai," he said.

But the influx of motorists to some Dubai petrol stations, especially those near Sharjah continues.

Rafik Ali, a Dubai taxi driver, said the situation had not improved in Dubai petrol stations. "Queues are still long, and I always spend an hour to get petrol."

Petrol and diesel retail prices are subsidised by the government despite changes in the global market for oil and refined products. Enoc , which operates 82 stations in Sharjah, Ajman, Ras Al Khaimah and Fujairah, said it would have to spend Dh2.7 billion this year to meet costs of selling fuel at fixed prices.

Oil hit a high of $127 a barrel earlier this year in the international market. It now hovers at around $90 a barrel.

According to agencies, Enoc spent Dh1.5 billion in 2010 to balance the cost of raw materials and the government cap on prices.

Two varieties of petrol are sold by retailers in the UAE, with the 'special' variety costing Dh1.72 per litre, while 'super' sells for an additional 11 fils.

"The crisis is a result of a long-term impact of subsidies as well as lack of refining capacity in the emirates (other than Abu Dhabi),'' said Abhay Bhargava, Industry Manager, Frost & Sullivan.

Subsidised fuel is still the rule rather than the exception and Bhargava did not see any ''significant escalations taking place in the near future''.

The UAE is the world's third largest oil exporter with an estimated 2.5 million barrels pumped every day. Petrol consumption is estimated to be around five million litres per day.

But a growing population and lack of sufficient refining capacity has forced it to import nearly one million tonnes a year.

Could the crisis fuel a shift to smaller cars? Not in the near future, according to the analyst.

Short-term fillers cannot ease the situation. Compressed Natural Gas (CNG) cylinders could be the most feasible option, said Bhargava. This has the lowest relative turnaround time and with the least impact as compared to fuel cells/ electric vehicles. However, this too would require not just an import of cylinders but also significant investments into the infrastructure that can allow for convenient re-fuelling.

''Public transport may be an alternative... we do not see any major shift during the summer period at least. Following that, there could be a shift provided there is greater synchronisation between the various modes of transportation; especially metro and bus routes,'' he said.

© Khaleej Times 2011