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Fuel filling station are likely to remain commonplace longer in the United Arab Emirates than in other parts of the world as residents still have a strong love of high-performance luxury vehicles, according to a director of the Dubai-based Emirates National Oil Company (ENOC).
ENOC's director of EHSSQ (environment, health, safety, security and quality) and corporate affairs, Dr Waddah Ghanem Al Hashmi, told Zawya on the sidelines of the World Green Economy Summit in Dubai on Tuesday: "I think in certain countries that they have gone towards trying to eliminate fuel cars. I think whilst the UAE wants to move towards that eventually, I don’t think we are going to move towards that as fast, for obvious reasons", he said, pointing out that the country still generates a significant proportion of its revenue from oil.
A report published last week by analysts at Bank of America Merrill Lynch upgraded its forecast for the share of the market that will be taken up by pure electric (non-hybrid) vehicles to 12 percent of global light vehicle sales by 2025 (from 4 percent previously), 34 percent by 2030 (10 percent previously) and 90 percent by 2050. It cited changing customer preferences, an increasingly viable range of cost-effective vehicles, improved regulation and better infrastructure in terms of charging points.
It said this was likely to impact a variety of markets – most notably major oil companies, not only weakening oil demand because of lower petroleum use, but also downstream revenues as people use fewer filling stations.
"Big Oil's hope of maintaining or - as laid out by BP at its recent Downstream investor day - even expanding earnings generated from retail sites by offering charging points at filling stations will, in our view, only work at filling stations targeting long distance traffic (such as along motorways) - given our expectation of most charging being done at home," the report said.
Yet Dr Al Hashmi argued that there were three main barriers to the broader adoption of electric vehicles in the UAE.
"One of them is that electrical cars still have limitations," he said. "Secondly, electrical cars are generally more expensive, although the newer versions… they are coming up with cheaper versions."
"Thirdly, you don't have all of the different types of cars that you want. Certain people want to drive a Land Cruiser, a Range Rover, a BMW. Today, you cannot get every type of BMW, or a lot of the sports cars, [in electric formats]. So there [it] is still some way to go," he said.
ENOC currently has 116 service stations in the UAE - 17 of which are in the Northern Emirates. Two years ago, it announced plans to add a further 54 stations in the UAE by 2020. Six of these have now been built.
"We're building these stations because we need to provide that service today and for the foreseeable 10, 20, 30 years. So it is a worthwhile investment," he said. Although Enoc’s overall revenue (including upstream and downstream activities) fell 10 percent last year to $13 billion due to the lower oil price, the company’s 2016 annual report showed that its retail operation (petrol forecourts and the Zoom convenience store network) continued to grow. Gasoline sales increased by 7.5 percent to 2.49 billion litres, and diesel sales increased by 24 percent to 418 million litres. The company said that its Enoc and Eppco filling stations enjoy a 68 percent share of the overall market.
Dr Al Hashmi also said that all new stations are being topped with solar-powered canopies and, under a deal signed with DEWA two years ago, 15 already provide electric vehicle charging points.
“We are discussing at board level about transformation, about reinvention, about saying 'Is that customer experience going to be sustainable in the future?'. What else is the customer going to want in the future?',” Al Hashmi said.
He also argued that filling stations provide a much broader role than mere fuel points and are often used as convenience stores or meeting venues by some customers.
“You can get a shawarma, a falafel sandwich... in some stations - I don't know if it's true in our network - you can get a haircut. It's interesting times that we live in. It really is a time to reinvent,” Al Hashmi said.
In March this year, DEWA announced plans to double the number of electric vehicle charging points in Dubai to 200 across the city. Last month, it also announced a range of incentives to encourage the take-up of electric vehicles. These included free charging for electric vehicles and up to 200 dedicated free parking spaces across the city for electric cars until 2019, as well as free vehicle registrations for new electric vehicle purchases.
© ZAWYA 2017
ENOC's director of EHSSQ (environment, health, safety, security and quality) and corporate affairs, Dr Waddah Ghanem Al Hashmi, told Zawya on the sidelines of the World Green Economy Summit in Dubai on Tuesday: "I think in certain countries that they have gone towards trying to eliminate fuel cars. I think whilst the UAE wants to move towards that eventually, I don’t think we are going to move towards that as fast, for obvious reasons", he said, pointing out that the country still generates a significant proportion of its revenue from oil.
A report published last week by analysts at Bank of America Merrill Lynch upgraded its forecast for the share of the market that will be taken up by pure electric (non-hybrid) vehicles to 12 percent of global light vehicle sales by 2025 (from 4 percent previously), 34 percent by 2030 (10 percent previously) and 90 percent by 2050. It cited changing customer preferences, an increasingly viable range of cost-effective vehicles, improved regulation and better infrastructure in terms of charging points.
It said this was likely to impact a variety of markets – most notably major oil companies, not only weakening oil demand because of lower petroleum use, but also downstream revenues as people use fewer filling stations.
"Big Oil's hope of maintaining or - as laid out by BP at its recent Downstream investor day - even expanding earnings generated from retail sites by offering charging points at filling stations will, in our view, only work at filling stations targeting long distance traffic (such as along motorways) - given our expectation of most charging being done at home," the report said.
Yet Dr Al Hashmi argued that there were three main barriers to the broader adoption of electric vehicles in the UAE.
"One of them is that electrical cars still have limitations," he said. "Secondly, electrical cars are generally more expensive, although the newer versions… they are coming up with cheaper versions."
"Thirdly, you don't have all of the different types of cars that you want. Certain people want to drive a Land Cruiser, a Range Rover, a BMW. Today, you cannot get every type of BMW, or a lot of the sports cars, [in electric formats]. So there [it] is still some way to go," he said.
ENOC currently has 116 service stations in the UAE - 17 of which are in the Northern Emirates. Two years ago, it announced plans to add a further 54 stations in the UAE by 2020. Six of these have now been built.
"We're building these stations because we need to provide that service today and for the foreseeable 10, 20, 30 years. So it is a worthwhile investment," he said. Although Enoc’s overall revenue (including upstream and downstream activities) fell 10 percent last year to $13 billion due to the lower oil price, the company’s 2016 annual report showed that its retail operation (petrol forecourts and the Zoom convenience store network) continued to grow. Gasoline sales increased by 7.5 percent to 2.49 billion litres, and diesel sales increased by 24 percent to 418 million litres. The company said that its Enoc and Eppco filling stations enjoy a 68 percent share of the overall market.
Dr Al Hashmi also said that all new stations are being topped with solar-powered canopies and, under a deal signed with DEWA two years ago, 15 already provide electric vehicle charging points.
“We are discussing at board level about transformation, about reinvention, about saying 'Is that customer experience going to be sustainable in the future?'. What else is the customer going to want in the future?',” Al Hashmi said.
He also argued that filling stations provide a much broader role than mere fuel points and are often used as convenience stores or meeting venues by some customers.
“You can get a shawarma, a falafel sandwich... in some stations - I don't know if it's true in our network - you can get a haircut. It's interesting times that we live in. It really is a time to reinvent,” Al Hashmi said.
In March this year, DEWA announced plans to double the number of electric vehicle charging points in Dubai to 200 across the city. Last month, it also announced a range of incentives to encourage the take-up of electric vehicles. These included free charging for electric vehicles and up to 200 dedicated free parking spaces across the city for electric cars until 2019, as well as free vehicle registrations for new electric vehicle purchases.
© ZAWYA 2017
