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.

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...

Trapped

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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...