Sunday, 5 June 2011

Where's Ze Betrol?

Queues during the last 'fuel crisis' here in  2008, when ADNOC was selling fuel for 
Dhs10 a gallon less than Dubai's filling stations. Story here.

It was a funny weekend. After being turned away by EPPCO and ENOC stations, we finally joined the snaking queues at ADNOC and bustled our way through the jostling and aggressive throng of cars competing to get to the ranks of pumps.

'Why no petrol?' I asked the EPPCO guy.
'Government issue, maybe.' He grinned.

Gulf News ran a report on the situation the other day, but has obviously continued to receive nothing but the traditional filibustering, half-truths and downright dis-ingenuousness from spokespeople. For instance, this little classic from ENOC, reproduced by Gulf News:

"Enoc is managing its fuel supplies to meet the current demand. This involves a two-pronged approach of regulating the distribution of fuel through our network, as well as upgrading selected stations."

Luckily, GN has got hold of some third party analysts who confirm that the issue is actually that of subsidies, with petrol distributors in the country losing money for every litre they sell. This has led to problems underwriting the ongoing loss and so we find ourselves in the odd position of living in an oil-producing nation where the petrol pumps have run dry. The assertion is one made by commenters to this here post on the issue back in April - we must have reached some sort of crisis point last week.

You'd think ADNOC would be pleased at the increased business, but looking at the economics, they're just losing more money faster than anyone else.

I can feel a petrol price hike coming up. Now, given I fill my Pajero for a sum of Dirhams that fills a small hire car in the UK in pounds (we pay per gallon what you pay per litre, people), you'd be forgiven for whipping out the world's smallest violin and playing us all a lament. But an increase in fuel would have a huge knock-on effect on things like food prices here.

Even Pepsi and Coke have put up their prices recently. Grief.


Mich said...

Yes, the petrol prices are maybe a laugh here compared to the UK, but in the UK, you might not need a car. I spent 20 years in London without a car. I can't spend a minute in Dubai without one. When I first arrived I used to fill my little Daihatsu for 30 dirhams. This has gone up to 45 now. And the same goes for almost everything else we're buying in the emirate now!

Gerry said...

gn's explanation doesn't actually make any sense.

what's clear, though, is that the petrol distribution companies here are really bad at logistics.

Tabellion said...

Mich, I weep for you - not. As Alex indicated, to fill your car in the UK would cost you £45 or more - out of taxed income. The grocery bill for an average family in the UK is around £150 a week. I don't believe the average UAE family pays Dh900 a week down at LuLu's.

As for Coke putting its prices up, to be fair to them, the cost had remained at Dh1 a can for something like 20 years.

Anonymous said...

Comparisons to the UK dont hold water. The UAE should be compared to similar oil producing countries like Saudi Arabia, Qatar , Kuwait, and even now prices here are the most expensive in the GCC.

If a Dutch florist buys tulips in Dubai and then complains about losses, its his fault.

Zythophile said...

Anonymous, the UK IS an oil producing country - UK-sourced oil and gas contribute around £40 billion a year to the UK balance of trade, The UK government, however, doesn't subsidise its own citizens' use of petrol - and if petrol prices in the UAE are higher than in the rest of the GCC, that's because the UAE isn't as stupid as other GCC countries are, pouring money into their residents' fuel tanks.

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