Illegal trading in diesel has almost come to a halt as the huge price difference between emirates has disappeared following the sharp fall in the price of the fuel.
When the price of crude oil topped $147 (Dh539) a barrel last July, truckers and other heavy vehicle drivers from Dubai formed huge queues at Adnoc petrol stations in Abu Dhabi, Al Ain, Sharjah, Ajman and other Northern Emirates to buy cheap fuel.
Subsidised diesel sold through Adnoc cost Dh8.60 per gallon – about Dh10 less than the Dh19.25 charged at Dubai-based Emarat, Enoc and Eppco outlets.
Now the price in Dubai has fallen to within Dh1 or Dh2 of the Adnoc price and drivers and illegal dealers have stopped going to other emirates to fill up.
Unscrupulous transport firms and heavy vehicle drivers made fortunes by trading illegally in diesel and cashing in on the price differential.
"There is no more pushing and shoving at our pumps," the manager of an Adnoc site in Ajman told Emirates Business. "We don't see any long queues for diesel in our pumps any more. When the Emarat and Enoc diesel price was Dh18 many trucks, buses and other heavy vehicles from other emirates used to come to Adnoc outlets in Sharjah and Ajman. Some truckers and transport operators went all the way to Abu Dhabi and Al Ain to fill up with diesel. Some drivers replaced their standard fuel tanks with larger ones so they could buy more subsidised fuel."
He said the company had been under tremendous pressure to increase the capacity of its storage tanks at many outlets due to meet heavy demand from Dubai customers.
Another petrol station manager said: "On many occasions we ran out of stock because the storage tanks were empty due to the rush of customers. The normal storage tanks were designed for normal market conditions, but when the oil price shot up, the tanks were emptied before the next delivery was received."
A third manager said: "Now our diesel tanks are not emptied because the daily turnover has come down. There is no additional demand from the Dubai customers. Now everything is under control."
Adnoc introduced smart cards to control sales of diesel and restrict the growth of the black market. The company also introduced a rationing system to vehicles depending on their size. Diesel sales at Adnoc outlets almost doubled due to heavy demand from Dubai companies and the rush caused traffic congestion in front of many Adnoc outlets.
Some illegal dealers bought subsidised diesel for the equivalent of Dh6 a gallon in Saudi Arabia, Oman and Bahrain and smuggled it into the UAE, where they sold it at a discount to construction companies.
But cutbacks in the construction sector have reduced the demand for diesel, which has also helped to end the illegal trading.
One trader said: "The demand for diesel has come down as construction activity has declined considerably. When the construction sector was booming there was demand from labour camps and remote construction sites.
"But the number of labour camps has decreased and there are not many takers for smuggled diesel. A major source of demand for smuggled diesel was the heavy construction equipment located in remote areas. Many of these machines are now lying idle and there is no demand for our diesel."
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