Thursday, June 16, 2011

NYT reports on gas lines in UAE

The New York Times picks up the story of petrol shortages in the United Arab Emirates:
For the third time in the past 10 months, service stations across the United Arab Emirates have been running out of gasoline in recent weeks.
...

The Sharjah Executive Council, a government policy-making body, is putting pressure on the fuel retailers for more information, after a three-week shortage in the emirate that has forced Sharjah residents to line up at the Dubai stations that remain open.

...

Dubai’s fuel retailers typically purchase oil at market prices and then sell fuel at a subsidized cost defined by the government. At a time when Dubai is struggling with more than $100 billion in debt, the gasoline shortages are exacerbating a problem that has existed for years as the cash-strapped fuel retailers look for solutions. On the other hand, Abu Dhabi, the wealthier emirate that holds nearly 95 percent of the U.A.E.’s oil reserves, has not faced supply shortages.
...

The U.A.E. had decided earlier to phase out subsidies for gasoline and even implemented two successive price increases.

“There was talk that this would continue, although plans to pursue this in the short term have been shelved because of regional unrest,” Mr. Dauba-Pantanacce said. “It is a sensitive subject as cheap oil prices have also traditionally been part of an unspoken understanding of redistribution of the national oil wealth among the population.”

Read it all here.

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3 Comments:

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