You all may find this hard to believe, but there's a gasoline shortage here. Yep - you read that right - a gas shortage here in the Emirates. Now it's only affecting five of the seven emirates in the UAE (Sharjah, Ajman, Ras al Khaimah, Umm al Quwain, and Fujairah). It's not affecting Dubai or Abu Dhabi, and it's not affecting Kuwait, Qatar, Saudi, or Bahrain. But since we technically live and work in Sharjah, it's definitely a part of our world. Here's a link to a newspaper article about it.
Here's what's happening. There are four companies in the Emirates that sell gas at service stations: (1) Adnoc - Abu Dhabi National Oil Company, and then (2) Emarat, (3) Enoc, and (4) Eppco - all headquartered in the emirate of Dubai. All four companies have stations throughout the UAE.
Abu Dhabi has oil - lots of oil - 10% of the world's oil - enough oil to pump oil for the next 100 years at current production rates. So Adnoc has no trouble producing and refining oil, and then selling gasoline. So the Adnoc stations have a virtually endless supply of gasoline - which they get at cost.
Now Dubai, on the other hand, only has a little oil left - mostly offshore. Oil only makes up about 8% of Dubai's GDP [they saw this coming a long time ago and have diversified their economy quite well]. Anyhow, what this means, though, is that the Dubai gas companies - Emarat, Enoc, and Eppco - have to buy gas on the world market at market rates. But the federal government here in the Emirates has a price cap on gasoline - 1.92 AED per liter [which is $1.97 per gallon for those of you in the US]. So what this means is that Emarat, Enoc, and Eppco buy refined gasoline, then aren't able to sell it at a price that allows them to recoup their costs. Every gallon of gas that they sell hurts their bottom line. The more they sell, the worse off they are financially.
So - a few weeks ago - the Emarat, Enoc, and Eppco stations in Sharjah and the four northern emirates started running dry. The companies said it was because they were "upgrading equipment" and that supplies would be disrupted for a few weeks. Nobody ever saw any "upgrade" work being done at stations, and no additional explanation was forthcoming. Nobody has officially said this, but the concensus seems to be that Dubai just doesn't have the money to subsidize fuel for Sharjah and the northern Emirates. Or maybe they have the money and just won't do it. In either case, only Adnoc stations have gas now.
Here's what's happening. There are four companies in the Emirates that sell gas at service stations: (1) Adnoc - Abu Dhabi National Oil Company, and then (2) Emarat, (3) Enoc, and (4) Eppco - all headquartered in the emirate of Dubai. All four companies have stations throughout the UAE.
Abu Dhabi has oil - lots of oil - 10% of the world's oil - enough oil to pump oil for the next 100 years at current production rates. So Adnoc has no trouble producing and refining oil, and then selling gasoline. So the Adnoc stations have a virtually endless supply of gasoline - which they get at cost.
Now Dubai, on the other hand, only has a little oil left - mostly offshore. Oil only makes up about 8% of Dubai's GDP [they saw this coming a long time ago and have diversified their economy quite well]. Anyhow, what this means, though, is that the Dubai gas companies - Emarat, Enoc, and Eppco - have to buy gas on the world market at market rates. But the federal government here in the Emirates has a price cap on gasoline - 1.92 AED per liter [which is $1.97 per gallon for those of you in the US]. So what this means is that Emarat, Enoc, and Eppco buy refined gasoline, then aren't able to sell it at a price that allows them to recoup their costs. Every gallon of gas that they sell hurts their bottom line. The more they sell, the worse off they are financially.
So - a few weeks ago - the Emarat, Enoc, and Eppco stations in Sharjah and the four northern emirates started running dry. The companies said it was because they were "upgrading equipment" and that supplies would be disrupted for a few weeks. Nobody ever saw any "upgrade" work being done at stations, and no additional explanation was forthcoming. Nobody has officially said this, but the concensus seems to be that Dubai just doesn't have the money to subsidize fuel for Sharjah and the northern Emirates. Or maybe they have the money and just won't do it. In either case, only Adnoc stations have gas now.
Well..I'm surprised to learn about the oil shortage, especially in Dubai. Nice article.
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