Ninety percent of gas stations in the Kingdom are running on private investments, said a study of the Saudi Chambers of Commerce and Industry. Specialized companies contribute to the remainder of the stations. This has resulted in a reduction of services and government control.
Results of a study conducted by Basam Al-Tawalbini, a student at King Fahd University of Petroleum and Minerals, and Ali Al-Qatani, a member of the Saudi Fire Department, entitled “Environmental Criteria,” yielded proof of the residents’ frustration.
The study showed that while the number of gas stations has reached more than 70,000 Kingdom-wide, at least one fourth of the facilities were not built in compliance with pre-construction regulations of the Ministry of Municipalities and Rural Affairs. This has a negative impact on health and lifestyle of residents in neighboring areas and these facilities fail to comply with environmental and atmospheric criteria.
The study also revealed that despite catering to over 7 million vehicles per day, at least 20 percent of gas stations were not properly equipped with necessities such as oil dumpsters to handle the nearly 150 liters of grease and lubricant waste omitted from each station daily.
“Nine out of 10 gas stations in Saudi Arabia are being managed and operated by people who control these stations, allowing for a missed opportunity to improve the service level of these stations to technologically compete with other gas stations around the world,” said Riyadh Al-Malik, president of the National Committee of Gas Stations in the Saudi Chambers.
He added that these conditions exist only in Saudi Arabia, while in the rest of the world it is mandatory for all gas stations to be controlled by specialized companies. These have demonstrated sufficient experience in developing and improving the level of services. Al-Malik said that there are tens of thousands of gas stations throughout the Kingdom with only seven companies registered to manage and operate these stations, including Saudi Company for Car Services and Equipment (SASCO), Al-Dreis, Al-Tashleet, Naft, Zaity, Diesel and Petromin.
Over the last five years, as the Kingdom’s construction sector has boomed, the establishment of gas stations has become the latest profitable investment trend for individual investors.
“In the last couple of years I have built four gas stations and found it a very profitable and an easy business to establish,” said a Saudi businessman who requested anonymity. “All an investor has to do is buy a plot of land, build the facility, provide necessary equipment such as gas pumps and once the project is complete advertise it for rent,” he said.
Another reason for the growth in popularity is that rents have reportedly been fetching as much as SR 150,000 to SR 2 million annually, 14 percent higher than other residential projects. Seizing the opportunity, the banks saw the strategic locations of the gas stations as a good place for their automated teller machines (ATMs).
Recently, the trend became a subject of scrutiny due to its negative impact on the Saudi government’s efforts to establish an improved infrastructure system while maintaining the Kingdom’s presentable image in the promotion of the country as a global tourism destination.
Not only are the government’s efforts being dashed, a number of Saudi citizens are also up in arms saying that builders of gas stations do not take into consideration the location of their construction projects. They only think about the extra profits to be made and not the inconvenience and unsafe effects the stations have on neighboring schools and residential homes.
“Since I built my home in Mohammadia district of Jeddah eight years ago, I have witnessed a number of businesses and other residential homes whose inhabitants have all become my neighbors. When a gas station was constructed only meters from my home, this became a cause for concern due to the level of noise and pollution which has almost become too much to bear,” said Zuhar Muhammad, a Saudi homeowner.
Unbridled growth of gas stations worries residents
