Is the current petrol shortage a sign of imminent price hike?



Sharjah Transport Company has received information that fuel prices are set to rise by 33 per cent following three weeks of shortage in Sharjah and Northern Emirates, a UAE daily reported today.

Petrol shortage DubaiA report in ‘Emarat Al Youm’ quotes sources at Sharjah Transport Company as saying any petrol price hike could hit its business, adding that the company has received information that prices could be raised to Dh10 from Dh7.5 per gallon – or 33.33 per cent.

“Taxi revenue in Sharjah has declined over the past three weeks for the first time and we expect further fall in case the petrol supply shortage is not resolved,” one source said. “We are worried that a prolonged crisis could inflict losses on us.”

According to the Dubai-based Arabic daily, the shortage has plagued most of the 82 petrol pumps owned by Emirates National Oil Company (Enoc) and Emirates Petroleum Products Company (Eppco) in the Northern Emirates for nearly three weeks.

Emirates National Oil Company (Enoc), on the other hand, has said that the fuel shortage was caused by ongoing upgrading of pumps and has nothing to do with its debt problems.

Burhan Al Hashmi, Enoc’s retail executive director, said he was not aware of any plans to increase petrol prices in the Northern Emirates despite reports to the contrary.

“Speculation by some that the petrol supply crisis and the closure of some stations was a result of debt default by Enoc is not true,” Hashmi said, as quoted by ‘Emarat Al Youm’.

“This crisis, which has spread to Sharjah and other Northern Emirates was a result of ongoing upgrading of pumps at our petrol stations… Enoc is now working on a quick solution to the crisis over the next few weeks by expediting our programme to upgrade the pumps.”

Hashmi said Enoc had already clarified the real reasons for this crisis in its reply to Sharjah Executive Council. “In our response, we affirmed to them that we are working on a solution in the next period,” he said.

“Concerning the reports that we are planning to increase petrol prices, these reports are not confirmed,” he added.