Fuel shortage? Financial Times and Emirates Economist on same page
... the latest shortages in some emirates of the United Arab Emirates may stem from a different type of crisis: a longstanding economic imbalance rooted in intra-federal politics.I explained this the other day, and also back in 2008 when the same thing occurred.
The petrol stations that have “run out” of gasoline are Emirates National Oil Company and EPPCO, both owned by the Dubai government.
Most affected outlets are in Sharjah, and other so-called “northern Emirates”, with more limited disturbance in Dubai. Abu Dhabi hasn’t suffered.
Initial excuses of maintenance work don’t really wash with analysts. More likely, they say, Dubai is trying to persuade oil-rich Abu Dhabi, the leader of this federation of seven emirates, to subsidise severe losses ENOC faces at the pump.
Oil companies in Dubai, which only has modest oil reserves, buy petroleum products at market rates, but they then have to sell petrol at subsidised rates set by the federal government.
The timing of these shortages is not so great for Dubai, which is grappling with a $113bn debt pile and is looking to tap the market for $5bn more....