Dubai’s Emirates National Oil Company (Enoc) plans to invest Dh2.2 billion to expand its retail network in the UAE and Saudi Arabia to meet rising demand and cater to Expo 2020 visitors.
State-owned Enoc will grow in the UAE to 191 petrol pumps by 2020 from 129 currently ahead of the world fair next year, Zaid Al Qufaidi, managing director of Enoc’s retail business, told reporters on Monday. The company plans to expand at least eight-fold in Saudi Arabia from 14 stations currently to 124 stations by 2030, which it could double if profit margins for operators in the kingdom are increased.
“It’s an ambitious plan as we look towards Expo 2020 in the UAE,” Mr Al Qufaidi said.
The UAE consumes 12 billion litres of fuel per year serviced by 566 stations, or 60,000 litres a day per station, which is double the global national average of 35,000 litres a day, according to Mr Al Qufaidi.
“That’s why we are expanding our network, because there is demand and we want to reduce the pressure on the stations,” he said.
In 2019, Enoc plans to open 15 new stations that include five petrol pumps and three mobile stations in Dubai, five stations in Sharjah by the beginning of August, and one each in Fujairah and Ras Al Khaimah.
By 2020, the company will open 47 new stations including 25 in Sharjah, 15 in Dubai (including three in the Expo 2020 site), one each in the northern Emirates of Ras Al Khaimah, Ajman, Fujairah, Umm Al Quwain, and three mobile stations.
In Saudi Arabia, Enoc will add three stations by year-end to reach a total of 17. It will add another 45 stations over the next five years and another 65 additional stations by 2028 to reach a total of 124 petrol pumps by the end of the decade. These will be spread in cities such as Dammam, Jeddah and Riyadh, and across the Eastern, Western and Central regions, creating a total of 500 jobs, he said.
On average, a new station costs about Dh20 million in the UAE and about 10m riyals in Saudi for the purchase of pre-existing stations in the kingdom, he said.
Though business in Saudi has a low profit margin, or about a third of what profit margins are in the UAE, Enoc could double its projected network of 124 stations if the government approves a recommendation to boost margins for operators in the kingdom, he said. A decision is expected to be made “very soon”, likely after the Eid holidays in early June.
Mr Al Qufaidi said 2019 will be a “tough” year for the energy sector due to fluctuations in oil prices but expects an improvement in June onwards.