Thursday, 23 June 2011

ENOC/EPPCO - Thrown Out of Sharjah?

Petrol (song)Image via WikipediaThe Emirates National Oil Company and the Emirates Petroleum Products Company, better known to us all as ENOC/EPPCO, or the ENOC Group, are facing a deadline to get their forecourts pumping fuel or face closure, according to today's papers who all delightedly slapped the news on their front pages.

As Mark Twain once said, "Never pick a fight with someone who orders ink by the barrel."

According to the reports (The National does by far the best job of reporting the story, BTW), the Sharjah Executive Council through the Sharjah Economic Department set a 72 hour deadline Tuesday (it meets each Tuesday) for the company to get its stations in Sharjah working again, which would give it until tomorrow (Friday) to comply. The ENOC Group operates 82 outlets across Sharjah and the Northern Emirates. Well, operated. They've been failing to actually sell any petrol for the past month.

The National reports that the penalty for non-compliance will be the closure of all service stations and facilities operated by the company in Sharjah. That's pretty hard-core.

The whole situation has been rendered that much more ridiculous by the company's early attempt at shrugging off the problem with a little slice of the mendacity that so many organisations here so readily employ when asked anything even remotely challenging by media. It appears we're learning the lessons all too slowly - it's not just print media that matter now: when you say your forecourts are closed because they're being upgraded, you can bet your bottom dollar that there are thousands of eye witnesses out there more than willing to share the 'Oh no they're not' online - with each other and, of course, with any watching media.

After that little slice of silliness, the company has refused any comment at all, every report in the media graced with the failure of the ENOC Group spokespeople to return calls or comment. The ongoing policy of silence in the face of public concern and the questions of media haven't helped the company at all. The explanation delivered to the Sharjah Executive Council (one was, apparently) is being treated by confidential by the SEC, but the papers have enough energy experts quoting away for us to be able to substantiate what commenters to my much, much earlier posts on this have said: the issue is one of being willing and able to continue to supply petrol at a loss because the company buys fuel on international markets and then has to sell at locally regulated prices, which are substantially lower.

Given this is the case, you'd be forgiven for wondering why they didn't just go ahead and say it. If the intention is to promote a change in the regulations or to gain some assistance in subsidizing the price of fuel, what could the possible harm be of letting the debate take place in public? If the company had been open and transparent about the situation in the first place, enunciated the issue and its position, it would likely have people understanding the issue and the company's response. There's even an argument that it would have prompted a faster and more positive resolution to the whole situation by bringing it out into the open.

Now they're facing being shut down and I can't see many tears being shed - particularly if they'll be replaced by nice, shiny ADNOC stations.
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Rupert Neil Bumfrey said...

This whole episode makes a mockery of the "National" in ENOC!

Grumpy Goat said...

According to one of my spies, the problem is caused by the skint govenments of Dubai, Sharjah and the Northern Emirates.

The federal government doesn't wish to fuel inflation by allowing petrol prices to increase, and therefore obliges retailers to sell the stuff at a loss. Yet with crippling debt and an overpopulated public sector, there's no money for subsidies.

ADNOC doesn't suffer in the same way because Abu Dhabi government is rather less skint.

Remind me. What does the U in UAE stand for?

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