The ENOC Case Study Continues

Image via WikipediaSorry, but I started following this story and I can't seem to tear my eyes away from the wreckage even as I try. Today's newspapers report Dubai based petroleum company ENOC's denial of yesterday's Gulf News story.

Yes, that's right. ENOC Group suddenly had something to say after something like a month of obdurate silence.

Top honours to The National once more, which carries a better researched and more rounded story, taking the opportunity to recap the whole episode and referring to ENOC, with perhaps a grim smile as it rewards weeks of treating the press as if they don't exist or matter, as a 'troubled company'. Khaleej Times couldn't bring itself to name its long-term rival and refers to 'reports in a section of the English media'. Gulf News itself wasn't for stepping down, running ENOC's denial but affirming its report that 'sources in the oil industry confirmed the possibility that other retailers have shown interest in assuming responsibility for those [ENOC's] operations'

Breaking its long silence has certainly brought ENOC to the fore again and will once again step up the pressure from media and the public for some form of clarity. Sadly, there hasn't been a lot of that around but ENOC's statement to the media yesterday does rather protest too much when it accuses Gulf News of baseless speculation.

Here are five rules of Public Relations that may help:

Rule One
News expands to fill a vacuum
This is a Great Truth of Public Relations. If you do not speak clearly and with purpose, you leave room for speculation. The media, like the people it represents, will speculate. Experts, pundits, the public will all speculate. Many will happily speculate for the media to use in its own speculative stories. If you decide to issue 'no comment' or, worse, not to pick up the phone, you have invited speculation round to yours for dinner and have no right to complain when your paintwork gets scratched and your carpet ruined.

Rule Two
Responding to speculation legitimises it
If you respond to one speculative report, you respond to all of them. Many major corporates have a policy of not responding to rumour or speculation, precisely because you really don't want to start affirming or denying purely speculative plays. It's actually a journalistic technique, to speculatively assert something to see if you get a 'bite'. By all means respond to legitimate public concern and hard facts presented to you. But don't fail to respond to those and reserve your powder just to waste it on speculation.

Rule Three
Don't pretend to play hardball
ENOC's statement asks for an apology from Gulf News. This was, in my professional opinion, a basic error (one of very many). Gulf News hasn't apologised and has stood by its story. So where are you going to go now, big shot? If you just let that go now, you just affirmed the story, which only ever discussed a possibility in its original form. Discussing a possibility is, of course, pure speculation. Better not to have gone there in the first place, IMHO...

Rule Four
Tell the truth, the whole truth and nothing but the truth
Interestingly, ENOC's statement only comments on one aspect of Gulf News' story, the possibility that ADNOC will be given the running of ENOC stations in Sharjah and the northern emirates. It doesn't comment on part of the story that discussed ENOC requesting a lifting of the price cap or the strong rejection of proposed solutions by government officials. It only talks to one fact in the whole story, but has now established the principle that ENOC will comment to correct facts presented by media. It's not a rounded statement, where one was most certainly called for.

Rule Five
Have a communications strategy
Have an agreed strategy in place, don't just go knee-jerking all over the shop. The National today gleefully trots out the original statement made to media by ENOC, that the affected stations were subject to 'technical upgrades' and the subsequent lack of any evidence to that effect. Having made a statement that few, if any, believed and then followed that up by totally ignoring the media, the company has now arguably lost public trust. As one commentator in today's National story has it:

“I doubt they want to hang onto the whole network, otherwise they would have supplied them. We’ve gone beyond that point now. It’s all speculation of course, but Enoc may just be trying to get a better price for them.”

That's pretty cynical, no? But it's hard to see what the company's management of the media and public transparency aspects of this story has done to mitigate such cynicism from the public, pundits and media.

Will ENOC/EPPCO Stations Reopen In The Northern Emirates?

(Photo credit: Gerry Balding)

The news broke a few days ago. with news outlets all reporting ENOC was seeking 'alternative sources' for condensate to feed its 120,000 barrel-a-day refinery in Jebel Ali. Yesterday, late in the afternoon (too late, for instance, to give pesky local reporters a chance to ask questions) it issued a press release announcing it had closed a deal with Qatar's Tasweeq to secure a supply of 20,000 barrels per day of condensate.

This, according to ENOC, avoids having to import Iranian condensate. To quote the release:

ENOC diligently adheres to all prevailing laws and regulations to ensure that its business is conducted in line with applicable sanctions, and has been continually studying the sourcing of alternative economically viable condensate feedstocks for its refinery in Jebel Ali.  

As a result of various steps implemented by the management, ENOC has imported 20% less Iranian condensate in the second half of 2012 compared with the first six months of the year. One of the challenges in managing the crude imports was the availability of alternate grades in required volumes and prices. 

By exploring partnerships with new suppliers, ENOC is highlighting its commitment to continually optimise its refinery operations, adherence to the highest ethical standards in all operational aspects and creation of long-term value.

Some commentators have inferred this may lead to the shuttered ENOC/EPPCO petrol pumps in the Northern Emirates re-opening, but there's no evidence in here at all of that. ENOC's under pressure to reduce its loss-making refining operations - hence buying crude from Iran in the first place - but has now come under pressure to find alternative sources.

That's not about to make things any better 'oop North' and mean they can start selling profitable petrol from their forecourts. It's more likely to be a 'like for like' pricing deal - and it would have been interested to be a fly on the wall of some of those meetings to see quite who was pulling the strings around here.

Perhaps an answer to that comes in the shape of those recent ENOC comments about alternative sources of supply, which coincided with a visit to the U.A.E. from David Cohen, the U.S. Treasury Department's undersecretary for terrorism and financial intelligence...

Anyway, it doesn't really matter that much. Everyone's got used to there being no EPPCO stations and although the ADNOC stations are busy, the long and ironic queues from the original 'petrol shortage in oil producing country' glee are a thing of the past.

ADNOC To The Rescue!

English: Emarat gas station, Masfut just west of Hatta city, UAE (Photo credit: Wikipedia)

Remember PetrolGate, the amazing story of how an oil-producing nation ran out of petrol? And the embarrassing silence of ENOC/EPPCO regarding the closure of its petrol stations in the Northern Emirates?


It's linked here for your viewing pleasure.

Now there's a new and fascinating twist to the tale. The Abu Dhabi National Oil Company, ADNOC, has signed an MoU with major retailer Emarat to acquire 74 of its 100 petrol stations across the Northern Emirates (Sharjah, Ajman, Umm Al Qawain, Ras Al Khaimah and Fujeirah).

ADNOC is the only fuel company in the UAE to refine its own petroleum, so it can sell petrol profitably at the UAE's subsidised prices, while the others have to buy their petrol on the international market. This means they were actually losing money for every litre of fuel they pumped.

Just in case readers living elsewhere in the world are interested, we currently pay Dhs 1.72 per litre or $0.47 or, if you prefer, £0.30. It's why I like chatting to London cabbies about how much it costs me to fill a Shogun (the Pajero is called a Shogun in Europe, one suspects because of a little Spanish accident). They're always cheery souls and it does them good to hear me chat about filling a 4WD for under twenty quid.

ENOC found it preferable to close its 51 petrol stations in the Northern Emirates rather than go on selling motion lotion at a loss. That loss cost the Government of Dubai (which owns ENOC) a cool $1.5 billion up to the end of last year.

ENOC's handling of the whole thing eventually led to the Government of Sharjah taking the unusual step of closing down all of ENOC/EPPCOs retail operations in the Emirate.

Amusingly, The National reports the news on the front page of its business section today, adding the detail,

"Like Emarat, Enoc has responded to losses by cutting its exposure in the Northern Emirates. It handed over its petrol stations outside Dubai to Adnoc last July."

This news was actually 'categorically denied' by ENOC last year when Gulf News originally ran the story of ENOC's Northern Emirates stations being taken over by ADNOC. The categorical denial was unusual, coming from a company that had maintained a policy of mendacity followed by radio silence.

Meanwhile, ADNOC will now operate a total of 224 petrol stations throughout the UAE. Profitably.

ENOC: It's About Time

Image by Getty Images via @daylifeThe Emirates National Oil Company, or ENOC as it's popularly known, has issued a statement to local media that claims it will lose Dhs 2.7 billion this year because of the cost its is having to bear to sell fuel at the subsidised oil prices currently mandated in the UAE.

You may recall, this is the petrol company that stopped supplying petrol, a slightly ironic situation given it is located in one of the world's richest oil producing nations. I posted about it all at some length, particularly with the PR mismanagement case study aspects of the story in mind: ENOC's spokesperson chose to be mildly mendacious regarding the reason why its stations had stopped pumping fuel and the company then clammed up like Sammy the Slamshut Clam in response to a constant slew of media and widespread public inconvenience.

ENOC is also, just in case you're interested, the proud owner of a deeply woeful website - including a media news section last updated in 2006, which gives you an idea of just how important the company considers its media relations to be.

The newspapers have slavishly covered yesterday's statement, despite the fact it contains no element of news whatsoever. Even the figure of a Dhs 2.7 billion projected loss isn't news, it was contained in the company's statement following its board meeting in May of this year. 

It's also oddly timed. The National ran a story three weeks ago quoting a top ENOC official in which the Dhs 2.7 billion figure and the tale of woe about subsidies was highlighted - in fact, the National's story actually contains a great deal more information than the statement GN and KT have so obligingly covered today. Even enfant terrible 7Days ran with the statement. Quite why the company has broken its silence now remains to be explained, but one is left with the strong feeling that there's something behind the timing of it. I suppose we could ask ENOC, couldn't we?

Or perhaps not. Gulf News' piece contains the amusing snippet: "A spokesman for Enoc declined to elaborate on the company statement when reached by Gulf News."

Silence. The New Comment.

Image via WikipediaI know I've been going on about this, but it really is such a brilliant case study. The Great Sharjah Fuel Crisis continues, with ENOC and EPPCO stations shut down last Friday by Sharjah police after having failed to supply fuel to residents in Sharjah and the Northern Emirates for a month.

As I predicted a while ago, the story started to internationalise - this story in the UK's Daily Telegraph (kind enough to quote yours truly) talks of 'baffled' residents in this oil rich nation unable to buy fuel. Tellingly it ends with these words: "No one from either ENOC or the other main petrol company affected, Emarat, was available for comment."

Bloomberg filed an excellent piece today, linked here, which continues the trend of international interest in the story. Being a newswire, the Bloomberg piece has made it into a number of interntional newspapers and websites. Bloomberg's story, an in-depth analysis of the situation, makes an important link between the ENOC Group issue and Dubai's indebtedness and economic stability, as well as drawing some interesting conclusions regarding political stability. The story isn't going away, in short, and now it's arguably starting to affect Dubai's reputation in a broader sense. I would humbly suggest this would not have been the case if there had been an agreed and effectively implemented communications strategy to start with.

Tellingly, the Bloomberg story contains these words: "An ENOC spokesman declined to comment when contacted by Bloomberg. A Dubai government spokeswoman didn’t respond to an email requesting for comment, and an official in Abu Dhabi National Oil Co. public relations division didn’t answer calls to his office and mobile phone"

Gulf News filed today with a follow-up story on the issue, which talks about the Sharjah government's resolution in solving the issue. You'd almost think journalists were keeping the story alive to punish the silent spokespeople, wouldn't you?

Somehow tenacious GN hack Deena Kamel Yousef managed to get through to the man so many journalists have failed to buttonhole and so the GN story contains this timeless quote from ENOC's Silent Spokesperson: "I cannot give a statement now, don't ask me questions I cannot answer. I agree that we should be more transparent, I agree 150 per cent, but we have directives not to talk about this issue now."

Deliciously, Deena twists the knife: "Pressed for answers, he made casual comments on the weather to change the subject."

Tellingly, the GN story also points out that: "Enoc's silent spell lasted for about two weeks while the spokesperson was on holiday after the trouble started. Repeated attempts by Gulf News to contact the company were unanswered."

On holiday? You're kidding, right?

ENOC/EPPCO - Thrown Out of Sharjah?

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.

Petrol Companies Revolt Against Credit Card Surcharges. Consumers to Get Stuffed. Again.

Although Gulf News reported in a news story that ENOC was collecting a 1.65% credit card transaction fee from customers, Emarat only got fingered in an editorial feature. Which is funny, because they also started passing on the 1.65% fee to customers on the 1st September.

Interestingly, ENOC didn't mention its move was due to any increase on the part of banks when it talked to Gulf News, but Emarat's explanatory leaflet to customers says the move comes 'due to increase in Bank Administration fees' and goes on to say that Emarat 'will add the 1.65% bank imposed fee to all credit/debit card payments...'

So Emarat is giving the clear impression to consumers that this move comes as the result of a new increase in fees from the bank. ENOC did not make that claim when it spoke to Gulf News, attributing the move to the loss it already makes selling fuel.

Charging consumers for the use of credit or debit cards is expressly against the merchant agreement that merchants enter into with the card networks. In fact, the card companies got all bellicose with GN when it was contacted by the newspaper regarding the ENOC move and both Visa and Mastercard made vaguely threatening 'this is not on and we're taking action' noises.

Banks contacted by GN called the move, apparently, 'unilateral'. Although if Emarat is also passing on the charge it would tend to suggest the move is 'multilateral'.

Passed over in the main by our brave news media, then, is the fact that a pitched battle is breaking out between petrol companies and the credit card networks and their acquiring banks. As usual, the people that are going to get royally screwed are the consumers. Sure, it's only a couple of dirhams in every hundred. But it's also yet another unwelcome price rise among a number of insidious little increases.

I do think the papers have missed the significance of this little standoff. You see, if these petrol companies get away with this (and there's no reason to suppose that they won't out here in the Klondike), you won't be waiting long for everyone else to join in. If Visa and Mastercard don't nip this in the bud soon, we might well be seeing a broader revolt breaking out. Which, although interesting to watch, is going to hurt consumers as merchants start surcharging us left, right and centre.

Sharjah Electricity and Water, as well as Emirates Post already charge a card handling fee - again in contravention of the card networks' stated policy - and Dubai Electricity and Water makes a 2.5% credit card surcharge at its cash collection points, although Internet card transactions are free of charge. In the UK, the world's most intensive credit card economy, merchants are specifically allowed to surcharge by law: although most don't, some (like low cost airlines) do. In many US states, regulations prohibit surcharging (nice bit of lobbying, card companies!).

In the UAE, the legislature has taken no stance - nor is it likely to any time soon. So it's down to the forces of 'laissez faire' and the 'market economy'.

Whoopee.

ADNOC - The Winner Takes It All?

Image via WikipediaGulf News certainly has the bit between its teeth on the ENOC Group story. Today's paper asserts that 'sources in the oil sector' have said the UAE government is 'moving to cancel licenses owned by ENOC and EPPCO in the northern emirates and allow ADNOC to take over the running of the service stations.'

That this move is being discussed seriously is hardly a surprise after the past few weeks' shenanigans, but the discussions (at least, those Gulf News reports) are remarkably wide-ranging. Apparently, the ENOC Group has been arguing that the fuel price should rise to realistic market rates - that would treble the price of petrol in the UAE. Although such a rise in fuel prices would be felt at the pumps, the issue is much wider than that. As a component in economic cost, petrol is an insidious little critter. If the cost of transportation of goods went up commensurately, we'd see some serious rises in commodity prices here, something that nobody really wants right now. Even the suggestion that UAE Nationals receive a petrol subsidy was apparently rejected - and quite, right too - they wouldn't be immune to the rise in the price of basic foodstuffs and other daily needs that would be triggered by unleashing a 300% increase in petrol cost.

Besides, if Abu Dhabi's ADNOC can profitably refine fuel at the current capped prices, why buy the stuff on international markets at all?

However, worryingly, for the last three days my local ADNOC hasn't had any Masafi, just Al Ain water. Please don't tell me this whole scenario is about to be repeated in the bottled water sector - I only drink Masafi...

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.

UAE Petrol Crisis. The Mystery Deepens

I retain my sense of wide-eyed amazement that this situation could be possible: a fuel shortage in an oil producing country. Today's newspapers are full of the story and a remarkable pattern is emerging of silence and mind-boggling mendacity on the part of the distribution companies being hit by the shortages.

In fact, The National (James Bond's favourite Middle Eastern newspaper, dontcha know) leads with 'Empty filling stations and the great fuel mystery', gleefully reporting that retailers Enoc and Eppco (two brands of the same company, in fact) have cited pump upgrades to their 167 stations across the country as being the cause of their empty forecourts. The newspaper's reporters visited a number of the stations and confirm what you already possibly suspect: there is no sign of any work going on to upgrade anything in any way whatsoever. I have personally seen closed stations opening again once a tanker has visited, so there must obviously be some degree of indecision regarding which stations to upgrade.

Gulf News contents itself with unquestioningly repeating the statements made by Enoc/Eppco regarding upgradation to the petrol pumping network facility terminal equipment. By the way, you can just juggle up the words from the last sentence as you see fit because whichever way you place them, they mean the same thing. Emarat has maintained a dignified silence throughout.


Meanwhile Dubai Eye Radio's The Business Breakfast interviewed an 'expert' who spent his time on air speculating that this could be some sort of pipeline issue.

Inside The National, we see mention of the issue of subsidies, regulated prices and supply that many are speculating is actually the issue behind the shortages - at current government-set prices and with oil prices hovering around the $100 mark, it's hard to retailers to do anything other than make massive losses - The National quotes Enoc's CEO as saying that selling fuel at the regulated price cost it Dhs1.5 billion last year - despite two very unpopular price rises taking place over the year. Adnoc, of course, refines its own fuel and so has been unaffected by the need to upgrade its pumps.

This remains speculation, however, as the retailers who have run out of fuel (sorry, who are upgrading their pumping infrastructure) have for weeks now either maintained a stoical silence or thrown out chaff in the shape of vague and arguably mendacious statements. That policy, so popular here but increasingly unrealistic in the age of online and social media resources, has led to a risible situation - everybody knows that something is very, very wrong but nobody is allowed to talk about it officially. It does rather remind me of the burrow in Watership Down where the society of well-fed, sleek rabbits who are being snared by the farmer who's feeding them are prohibited from using the words death or snare.

Trapped

Image via Wikipedia
We are blessed in Northern Sharjah in that we are surrounded by ADNOC and Emarat petrol stations - the closure of every EPPCO and ENOC station in the Northern Emirates has hitherto had no practical affect on our lives.

Until I left Dubai yesterday with no petrol. I didn't realise until we'd hit 'murder mile', the road that links Dubai to Sharjah. We had travelled 30km with the petrol light on (I always zero the trip when it comes on so I know I've got 30km to get petrol in), which was not good news. I have once travelled 32km without petrol but I'm far too scared of running out to ever push it further than that.

There are two reasons why running out of petrol is a major fear factor. My first, and principle, reason is that I could never live with myself for running out of petrol whilst driving in one of the world's major oil producing countries. The second is that running out of petrol means getting a taxi and then finding an open petrol station. Now, in the UK I know they all sell nice red fuel cans. I have never seen one on sale here and don't know where I'd get a suitable container from. I've seen petrol sloshed into all manner of odd containers at petrol stations, but I've never seen an actual petrol container used. The prospect of having to dance around trying to find a spare container at least marginally fit for purpose doesn't fill my heart with stuff.

I have only run out petrol once before in my life, and that was on purpose. The publishing company I worked for in the mid-eighties had gone bust following an acrimonious boardroom putsch and The Evil Receivers had demanded the prompt return of my company car. They got it too - empty from driving around the building and coasted nicely to its parking spot after the engine had died. (I still have the cheque for 67p from them in settlement of hundreds of pounds of outstanding expenses).

Of course, southern Sharjah is the land of EPPCO and ENOC. Driving around, pricked by increasing desperation I started to realise just how this whole closure thing must be hacking a load of people off - the odometer kept ticking as we tried to head towards where we knew there was an Emarat station (but which I had no hope of reaching before the inevitable cough of a dying Pajero was heard). 34km, 40km and by now my hands were sweating. I have never seen so many EPPCO and ENOC stations in my life. They seemed to be around every street corner. And then, at last, at 43km, an Emarat station hoved into view, with cars cascading down onto the street as they queued and jostled for fuel.

It did rather leave me wishing fervently that ADNOC would hurry up and take 'em all over...

Of Genies And Bottles

Apart from a vague and popularly considered mendacious statement about pump upgrades, the petrol station operators responsible for the fuel shortages in the UAE have remained silent. Both Gulf News and The National report today with sidenotes to the effect that no spokesperson could be reached from Enoc/Eppco or Emarat. And, in fact, The National notes that officials from Jebel Ali Port were also unavailable or not commenting.

Gulf News today played catch-up with The National, which sent reporters to Enoc/Eppco petrol stations to determine that no pump upgrade work was going on, as it reported yesterday. GN today files on 'sceptical motorists' who point out, as I have indeed found, that stations 'closed for upgrading' miraculously open after the supply truck has swung by. The National has, once again, done a sterling job.

The lack of transparency is so stunning, it's amusing. This is, indeed, humour of the incongruous. And, of course, by failing to tackle the very proper concern of the general public, the operators are making it all a great deal worse. The papers are rubbishing the statements and talking to petrol pump attendants, motorists, analysts - in fact, anyone who'll talk to them. The result is a rising tide of reporting and growing public alarm which is leading to panic buying. This, of course, is putting more pressure on those stations that do have fuel and now even Adnoc stations are running dry despite the fact that they don't actually have an underlying supply problem.

So by staying silent, the operators are creating an ever-larger rod for their own backs. Tell people what the problem is, how you're solving it and how long it'll take. It's not actually very difficult.

What's the solution? Well, even the most hide-bound of morons would have worked out by now that the genie is out of the bottle. Social media, that Internetty thing, allows people to share opinions and views - so we all know what the papers are trying to prove - the stations aren't closing for upgrades. They haven't got any fuel to sell us because deliveries aren't coming through. There is a very real and basic problem here and it's not logistics or maintenance. As Gulf News quotes Kate Dourian, Middle East editor at Platts:

"Emarat, like the other two main gasoline suppliers, Enoc and Eppco, has for years been operating at a loss because it buys product at international prices and sells at government-regulated prices below market value."

This GN story goes into some depth regarding the subsidies issue.

That's not an 'issue at Jebel Ali' or a 'pump upgrade'. That's a very real systemic problem that could well have medium to long term effects - the issue has been bubbling under for months, with incidents of shortages going back to last year. So this is hardly a new situation - there has been plenty of time to plan a better, smarter communications strategy than dumb silence and unsustainable assertions.

The irony is, of course, that if irate consumers withdraw their custom, these companies will breathe a sigh of relief! So why not just clam up and wait for it to all blow over? Once supplies are restarted, people will forget all about it and life will go back to normal. They're not answerable to any consumer association or ombudsman, so a strategy of silence won't do them any harm, right?

Wrong. It's yet more bad publicity for the country as a whole (the oil producer that ran out of fuel - wait for the internationals to pick that one up) driven by old-fashioned contempt for the media and public that has resulted in considerable concern and inconvenience for a large chunk of the population.

We can all see the genie. Perhaps it's time for the operators to tell us what they're planning to do about it. When they do, they can console themselves with this: there's no shame in telling the truth.

ADNOC Buys Out Emarat Network - Finally

(Photo credit: SimonQ錫濛譙)

So it seems that the northern emirates' green gas stations are finally to go blue - ADNOC has announced it has signed an agreement to acquire Emarat's 75 service stations and its Sharjah distribution terminal. The service stations will 'gradually' be rebranded, according to Gulf News today.

This agreement is presumably different in some way to the memorandum of understanding the two signed in May of last year. That was reported at the time to relate to "74 of Emarat's 100 stations in the northern emirates".

I posted about it at the time and thought no more of it, but sure enough there appears to have been a year-long process turning an MoU into an actual deal. Which is not the niftiest piece of M&A work I've seen, I must say. One does wonder what the stumbling blocks were to cause such a hiatus between intent and action.

Just as a reminder, the story's all about the cost of subsidising petrol, because Dubai doesn't have a refinery, its petrol distribution companies have to buy at market rates and then meet a Federally mandated subsidised price point, which loses them significant amounts of money. So both ENOC/EPPCO and Emarat wanted out of the Northern Emirates pronto. Emarat may have negotiated the transition more elegantly. The end result was that most amusing of situations, a petrol shortage in an oil-producing country.

Try as I might, I can't find the story on Gulf News' website. It's not in business, not in oil and gas and doesn't come up in a search of the site. And yet it's front page business in the print edition. I wonder why?

The whole shebang won't really change much for drivers in the north, particularly in Sharjah where queues at the ADNOC stations can get really quite long. The red EPPCO stations have been partly or totally dismantled or just stand idle, as do the light green ENOC ones - unloved, rubbish-strewn and dusty they stand, useless pieces of seemingly unwanted real estate...

UAE Petrol Retailers Are Breaking The Law It Seems

(Photo credit: 401(K) 2013)

A report in today's Gulf News quotes Omar Bu Shahab, CEO of the Commercial Compliance and Consumer Protection Division (CCCP) in the Department of Economic Development in Dubai as saying that charging 2% fees on credit and debit card transactions is a violation of consumer protection law.

While he was commenting on an attempt by a GEMS school to levy a 2% processing fee on credit and debit card transactions, his clarification also applies to Emarat and EPPCO/ENOC service stations, which charge the fee on credit card transactions for fuel. This surcharge appears to have been the resolution of a spat between the credit card companies and the fuel distributors dating back to 2007 - and the early days of this here very blog. The story from way back then is suitably linked 'ere. Basically, the retailers (not ADNOC, you'll note) have always charged extra for credit card purchases, in violation of the card issuers' agreements and when the card companies kicked off, the retailers just stopped taking credit cards. They've recently started again, but with a Dhs2 'service fee' on any transaction for fuel up to Dhs100. In short, 2%...

“Retailers who are charging extra fees on the credit card or debt card payments are violating the consumer protection law and will be subject to penalties,” Mr Bu Shahab told the newspaper that tells it like it is.*

So it'll be interesting to hear what the petrol companies say when the media come calling, won't it?

*Well, sometimes.

Is Silence Golden?

Image via WikipediaGulf News confirms what my eyes can see - EPPCO and ENOC stations in Sharjah have been sealed off today, shut down by the Sharjah government because the company failed to respond to the Sharjah Executive Council's (quite proper) concerns that a major supplier of petrol and diesel to people living here has simply failed to pump any of the stuff for something like a month now.

Worse, the company chose (as I have pointed out many times, with apologies for the repetition) to maintain a policy of stoicism - silence in response to the media and silence in response to the Sharjah government. The end result? They've been shut down and their brand is in tatters, reduced to a laughing stock.

The petrol company in a leading oil producing nation that couldn't actually supply petrol. That's pretty special, no?

As Bad As It Gets

It can't get much worse than this. The latest development in the UAE's petrol shortage saga is that the Executive Council of Sharjah, one of the seven Emirates that makes up the UAE, has demanded an end to the petrol shortages and a full explanation of what's behind them by the end of today from Enoc/Eppco.

It's a clear enough sign that the Executive Council doesn't buy the pump upgrade story, either. But then, did anyone?

How bad can it get for a company? When do you have to recognise that mendacity and silence won't wash any more - that you actually owe a duty to people? When a government is forced to call you to task publicly and demand answers from you? I guess that's about as bad as it gets.

As Matthias, son of Deuteronomy of Gath, tells us: "Worse? How could it be worse?"

Gerbil Arlee

Dramatic Gerbil (Photo credit: Wikipedia)

I was once chatting to an American gentleman who insisted he was going to Gerbil Arlee. It took a couple of repetitions for me to work out what the hell he meant. Ever since, the lesson in pronunciation has haunted me.

It's not often, living in Northern Sharjah, I get to visit Jebel Ali Village. Tomorrow gives me that rarest of things - a reason to do so. For tomorrow, ladies and gentlemen, is the Jebel Ali Village Festive Family Market and I have once again been talked into destroying any scant Serious Thriller Author Mystique I might have by old poo pants and am sharing a table with her to flog a handful of books to an uncaring and disinterested public.

This time I've got no 'get out of jail' card. I'm in it for the duration. And the good news is if you wanted to get your hands on a nice, freshly minted paperback copy of Shemlan: A Deadly Tragedy I have copies for sale. You'd otherwise have to buy 'em direct from Amazon or The Book Depository, while you can get Olives or Beirut from most reputable UAE bookshops.

It's on from 1-5pm. There are lots of stalls there, a tombola and other stuff. There may well be a goat stuck in a Ferris Wheel. You turn off the SZR at Junction 25 and sling a left at the second roundabout as if you were going to the Mövenpick Ibn Battuta Gate Hotel and the car park is to your right behind the ENOC station. Look, here's a Google map an' everyfin'.

Do by all means swing by and say hello or register your complaint or disappointment. No refunds given.