Harsher penalties for fuel smuggling will ‘safeguard the UAE’s oil producers’

Suhail Al Mazrouei said a new federal law will help in the fight against the illegal sale of petrol and diesel.

Haneen Dajani

May 2, 2017

ABU DHABI // The smuggling and sale of cut-price oil must be tackled to safeguard the country’s oil producers, the energy minister said.

Suhail Al Mazrouei said a new federal law would help in the fight against the illegal sale of petrol and diesel.

Smugglers bring oil into the country on boats and by road and undercut local producers, he said.

In addition, there have been significant thefts of tankers and storage units, including Dh472,000 worth of diesel from telecoms firm Etisalat three years ago, in an incident that affected coverage.

The minister was speaking as the Federal National Council debated a draft law that could allow for fines of up to Dh500,000.

“I believe this penalty is suitable, and we have raised it 10-fold in case of repeats,” Mr Al Mazrouei said. “Because the first offence could be out of negligence, and the goal is to fix the situation.

“We energy ministers are on alert, hoping nothing will happen that will damage the reputation or safety of the country until the law is issued.

“Today we have the biggest ports for re-export, and it became necessary to have a clear law that clarifies regulations; how to transfer the product from one emirate to the other, how to licence, how to address smuggling.”

The new regulations govern the transfer of oil between emirates and will also ensure the quality of various products.

“This needs to be organised, because the UAE needs to ensure its reputation as a petrol producing country,” he said.

Repeat offences can carry a Dh5 million penalty. At present, the penalty has been a lesser jail term and a Dh30,000 fine.

The fine applies to those who possess commercial quantities of petroleum from an unknown source.

National oil companies have suffered losses as a result of ­illegitimate competition, FNC members said before the debate. The minister emphasised that the law needed to be issued as soon as possible.

“It has taken a long time, some three years, but it will be a unique law because it combines local and federal authorities that benefit public welfare,” Mr Al Mazrouei said.

Once the new law comes into effect, companies will have a two-year amnesty period to ensure that the transport of oil, for example, meets the new regulations. And the Cabinet could extend it for another year for certain parties.

FNC members said diesel thefts from stations and stores had, generally, been on the increase.

In 2015, the Omani authorities reported that they were on the lookout for an increase in smuggling after the UAE raised oil prices.

And 2013, the UAE uncovered 85 instances of petrol smuggling – 48 in Abu Dhabi, 11 in Dubai, 15 in Ajman, five in Sharjah and six in Ras Al Khaimah.

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