Tuesday, June 7, 2011

Even in the land of oil, we have problems with gas

I've been curiously following a series of articles in the paper about gas shortages in the Northern Emirates. (Wait, what did you think I was going to write about? ;) Apparently, a number of gas stations have closed temporarily in the last few weeks. This hasn't affected Abu Dhabi, but there were some issues in Dubai for a day a few weeks ago. People have had to wait in line for hours as the stations that are open have huge lines. And, I think I've mentioned before that there aren't as many gas stations as you might expect in the land of oil. Not at all like in the US where you find them on almost every city street.

It just didn't make any sense to me. How can a region that produces so much oil, have a shortage of gas (or petrol as it's called here)? Well, today's paper presented some additional perspectives. Some retailers were saying that the closings are because they are performing upgrades to the pumps. The problem is, passersby couldn't see any work being done. Another story claims that it's financial. There is a federal cap on petrol prices, which means the retailers have to make up the difference when the price per barrel goes over $45 (it's currently at $100). For some companies, this has meant that selling fuel at the regulated price cost them $400 Million last year and they expect that to increase by 80% this year if prices continue as they are. YIKES!

I don't claim to know the real story, but it sure is interesting that with this much oil you can have trouble filling your tank.

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