Emirates National Oil Company (Enoc) said it plans to invest close to Dh2.2 billion over the next 10 years to expand its retail presence in the UAE and Saudi Arabia as it sees strong demand for fuel.
Zaid Al Qufaidi, managing director of Enoc Retail, said the large demand is part of a bigger trend in the UAE where fuel consumption is well above the global average. He said each Enoc station in the country pumps 60,000 litres of fuel per day, compared to an average of 35,000 litres a day per station in other countries.
The demand comes even as the UAE’s government aims to reduce carbon emissions in the country by reducing consumption of fossil fuel and replacing it with more sustainable options such as hybrid fuel and solar power. In August 2015, the government removed subsidies on petrol prices, in a move aimed at lowering consumption and improving fiscal savings.
For Enoc, the removal of subsidies has made its retail unit profitable as of late 2015 as petrol prices rose. While the company, which is owned by the Dubai government, does not disclose its earnings, Al Qufaidi said profit margins in the UAE are strong.
Still, he expected 2019 to be a “tough year” for the company, citing challenges in the energy industry.
At a press conference in Dubai on Monday, Al Qufaidi said Enoc, which currently has 129 service stations in the UAE, will add 15 new stations across Dubai, Sharjah, and the Northern Emirates by the end of this year. It will then build 47 new stations in 2020, bringing its total to 191 stations in the country.
In Saudi Arabia, where Enoc is on a more aggressive growth plan, the company is planning to increase its presence from the current 14 stations to 124 stations by the end of 2028. This comes as Saudi Arabia’s government tries to consolidate the number of fuel station operators, appointing Enoc as one of those operators.
The company said its new stations in the UAE will all have stations to charge electric vehicles, and that it is in talks with the Saudi government about having electric stations in the Kingdom, too.
Al Qufaidi said that there is growth in alternative sources of fuel, but they were still not the dominant ones.