UAE’s official news agency WAM announced on Monday Abu Dhabi National Oil Company (ADNOC) has taken over 74 Emarat’s service stations spread across the northern Emirates.
According to WAM, Abu Dhabi owned ADNOC Distribution and the UAE Federal government-owned Emirates General Petroleum Corporation (EMARAT) signed a Memorandum of Understanding (MoU) under which the former will takeover 74 of the latter’s service stations in the emirates of Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain, and Fujairah after studying the location of stations in each emirate.
The MoU was signed by Abdulla Salem Al Dhaheri, General Manager ADNOC Distribution and Adel Khalifa Al Shaer, Acting General Manager of EMARAT.
The objective of the stated takeover is to develop and strengthen cooperation and exchange of experience between the two companies while providing best services to its customers and service stations clients.
Due to the price ceiling imposed on petrol prices by the federal government, Dubai-based fuel retailers Emarat and EPPCO/ENOC have been losing millions of dollars for years due to high oil prices. Both of them buy refined oil from international market at higher rates.
The problem reached acute levels last year when EPPCO/ENOC were forced to close down their service stations in Sharjah due to supply interruptions.
Many of the residents that Arabian Gazette spoke to were surprised that Emarat is taken over instead of EPPCO/ENOC service stations.
UAE is the world’s 6th largest OPEC oil producer and is ranked 7th in the world with 6.65% of the world’s oil reserves or of 97.8 billion barrels.
UAE’s Federal National Council (FNC) recently came out with a report claiming that petrol prices in the UAE is the third highest in the Arab world after Syria and Tunisia.
On 23 May, FNC put forward a proposal urging the UAE government to reduce the petrol price by as much as 60%, by increasing subsidies to petrol and fuel prices so as to match prices with other Gulf countries.
However, Mohammad Bin Dha’en Al Hamili, UAE’s Minister of Energy said that the the country’s retail petrol prices are already subsidised by the government to the tune of AED1.20 ($0.33) per litre. Currently, UAE price of petrol retails at AED1.72 ($0.47) per litre, costing the retailers over AED0.50 ($0.14) per litre.
The emirate of Abu Dhabi owns most of the oil reserves in the UAE, while other Emirates own or produce negligible amount of oil. If the Abu Dhabi state-owned ADNOC was willing to sell petrol to the retailers at a subsidised rate, the problem would have been solved.