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Where, oh where, did the petrol go?

Where, oh where, did the petrol go?

Kipp takes a look at the various conspiracy theories on the cause of the ongoing petrol shortages.

June 13, 2011 4:08 by

A headline from this morning’s The National may read “Petrol shortage rumbles on without explanation” but there is no denying that there are plenty of rumors and conspiracy theory. Never one to lend an ear to idol gossip, Kipp does a quick round up of the various theories doing the rounds.

Theory # 1: Technical Upgrades

Well this isn’t so much of a conspiracy as it is an explanation from petrol stations Enoc and Eppco which claim they have shut down due to “technical upgrades.”  Then again, many have observed there not to be any construction going on at the pumps with the disruption. What is more, if indeed there were “technical upgrades” wouldn’t it make more sense for these nationwide chains to do the upgrades in phases, instead of doing it all at once?

Theory #2: The demand has increased

Dalton Garis, associate professor of economics at the Petroleum Institute, Abu Dhabi told Gulf News: “Demand has increased which could pressure the refineries themselves. After today retailers and suppliers will probably be devising linear programmes.” Hmm, seems to be a plausible enough explanation: only why did the demand increase all of a sudden?

Theory #3: Cash flow problems

Kate Dourian, Middle East editor at Platts, tells Gulf News the recent shortages are a result of a shortage of cash on the part of the petrol retailers: “Emarat, like the other two main gasoline suppliers, Enoc and Eppco, has for years been operating at a loss because it buys product at international prices and sells at government-regulated prices below market value.” What is that? You mean the fact that petrol stations do NOT accept credit cards hasn’t helped the issue, Kipp asks facetiously…

Theory #4: Power Play on Display?

This is all part of a power play between Abu Dhabi and the Northern Emirates, read, the rest of the UAE. Current suggests that this may all be a “behind-the-curtains power struggle between the increasingly wealthier emirate of Abu Dhabi and the increasingly resource scarce rest.”

Theory #5: Possible price hike?

Forget the last week’s OPEC meeting: latest conspiracy theory enthusiasts would know that the Sharjah Transport Company has allegedly received information that fuel prices are set to rise by 33 per cent. Emarat Al Youm reported earlier today that petrol prices “could be raised to Dh10 from Dh7.5 per gallon.”

So there you go. What do you think?

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  1. Peter Thomas on June 13, 2011 10:27 pm

    Never lend an ear to idol gossip; idols are notoriously unreliable sources of information!

  2. Rod Campbell-Ross on June 14, 2011 1:42 am

    Oil supply is constrained. That is why there are shortages and prices are high.

  3. MK on June 14, 2011 11:29 am

    @Rod C: Supply is actually above the target level. Just look at the article figures here:
    the OPEC target is well met and even surpassed!
    The problem is something else and it’s political. It has nothing to do with supply and demand.


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