The New York Times has a terribly mangled piece today about 'gasoline shortages' in the emirates which together make up the United Arab Emirates:  Gasoline Crisis in Emirates Brings Lines and Fears

DUBAI — For the third time in the past 10 months, service stations across the United Arab Emirates have been running out of gasoline in recent weeks.

The fuel retailers have cited technical maintenance as the main reason nearly 200 stations have been turning customers away at the pump. But analysts say the shortage may be related to the phasing out of government subsidies for gasoline amid rising crude oil prices.
…

For starters: Why write an 800 word piece on consumer gasoline prices in the U.A.E. or elsewhere without ever mentioning that price? Isn't that of interest to the reader?

For the record: The prices at the pump in the U.A.E. are currently regulated by the federal government of the U.A.E. at Dh1.72 per liter ($1.79/gl) (€0.33/l), which is about half of the world market price.

And what are we to make of this in the NYT piece?

Diana Georges, 26, a Sharjah resident who commutes to Dubai for work at an advertising agency every day, began filling up at stations in Dubai after visiting four stations in Sharjah that were shut this week.

“Now, I try not to wait until my tank is even half-empty,” she said. “I fill it right away in Dubai because I’m worried I won’t find gas later on or that the station will only agree to fill a minimal amount.”

According to that statement, there is a supply problem in the emirate of Sharjah, but not in the emirate of Dubai. But how does that statement then fit to the opening paragraph "service stations across the United Arab Emirates have been running out of gasoline in recent weeks"? And how do they fit the narrative given a few lines later?

At a time when Dubai is struggling with more than $100 billion in debt, the gasoline shortages are exacerbating a problem that has existed for years as the cash-strapped fuel retailers look for solutions. On the other hand, Abu Dhabi, the wealthier emirate that holds nearly 95 percent of the U.A.E.’s oil reserves, has not faced supply shortages.

But Diana Georges fills up in Dubai. The gas shortage she responded to is in Sharjah, not Dubai, so how does this relate to Dubai's debt? The NYT article does not answer that question.

Indeed the piece misses the whole background story. It quotes an 'expert' from Booz who resides in Beirut and someone from the London based Standard Chartered Bank. Local business voices are missing as is obviously knowledge about the local businesses and politics.

The real story here isn't about 'gasoline shortages' in the emirates, there is none, but about distribution companies owned by Abu Dhabi squeezing distribution companies owned by Dubai out of the market. The real story is about competition between the ruler of Abu Dhabi and the ruler of Dubai.

Within the U.A.E. only the oil-rich Abu Dhabi has gasoline refinery capacity while Dubai and the other smaller emirates must import their needs. Three of the four big retailers in the U.A.E. buy gasoline at the wholesale world market prices but have to sell the gasoline at a loss for the regulated price. The other retailer gets it supplies from the refineries in Abu Dhabi. The regulated price is set by federal government. But the companies are supposed to get reimbursed for the difference between world market price and subsidized consumer price by their local government. When that does not happen a distributor will have to stop selling to consumers.

For a long time there is a sometimes bitter competition between the leaders in the emirate of Abu Dhabi and the leading family in the emirate of Dubai. Abu Dhabi has all the money as it has and exports most of the raw oil of the emirates while Dubai has all the glory as a business center with many high rises but now also all the debt from the real estate bubble there. Dubai's rulers were very proud about erecting Burj Dubai, the tallest penis like structure ever build, but when the financial crisis hit it had to ask Abu Dhabi for a bailout. To the embarrassment of Dubai's ruler Mohammed bin Rashid Al Maktoum, Burj Dubai was renamed Burj Khalifa after U.A.E. President and emir of Abu Dhabi Khalifa bin Zayed Al Nahyan.

There are four gasoline distribution/retailer companies in the U.A.E., Adnoc Distribution, Emerat, Enoc, Eppco. They all have stations in several of the emirates. Adnoc Distribution is owned and subsidized by the Abu Dhabi National Oil Company. Emarat is owned by the federal U.A.E. government and additionally subsidized by the local Abu Dhabi government. Both of these companies seem to have sufficient supplies and sell without any problem. There is therefore no general gas shortage in the emirates.

Enoc and Eppco's are owned by Dubai and subsidies to them are paid by the local government of Dubai. They have shut down their stations.

From a recent piece in The National, a paper from Abu Dhabi (corrected).

Enoc and Eppco have said the shortages, which began about two weeks ago, were caused by technical upgrades that shut down stations.

Yet none of the Enoc and Eppco stations in Sharjah have any sign of technical upgrades in progress, and most have been dry for days.
…
Based in Dubai, Enoc Group has 167 stations, with locations in every emirate but Abu Dhabi.
…
For its part, Adnoc Distribution increased its supply of fuel by 35 to 40 per cent in its 59 stations in Sharjah and the four northern emirates, Abdullah Salem al Dhaheri, general manager of Adnoc, told Al Ittihad newspaper.
…
Adnoc manages 194 stations across the country, 135 of which in Abu Dhabi. The company is planning 234 additional modern stations nationwide by 2012.

Adnoc, owned by the Abu Dhabi National Oil Company which also has the refinery capacity, wants to expand its distribution network. Within the federal U.A.E. government, Abu Dhabi has the most say as it has most of the money. The federal government sets the consumer price for gasoline. The local government of Abu Dhabi and of Dubai who own the distribution companies have to make up the difference between world market price and regulated consumer price. Abu Dhabi can easily do that for its companies Adnoc and Emerat while Dubai is broke and can not do so for Enoc and Eppco.

Now Abu Dhabi is using its power on the federal level to favor the gasoline retailers it owns and squeezes the retailers owned by the cash strapped Dubai government out of the federal market. Abu Dhabi may eventually may make an 'offer' to Dubai to buy up those retailers.

The story is simple and easy to understand for anyone who follows the local news which even headlines the real issue: Enoc's loss is Emarat and Adnoc's gain.

But for whatever reason the New York Times wants its readers to believe that there is a general fuel shortage in the U.A.E. even when that is not the case.

(The NYT piece was written by Sara Hamdan who according to her LinkedIn profile is a "Stringer for The International Herald Tribune and The New York Times." Could the New York Times increase the quality of its pieces by paying a real journalist to write its stories instead of a 'stringer'?)