Why is there a fuel shortage? What’s causing the latest diesel supply issues at UK petrol stations


Drivers are facing tough times, as a fuel shortage has come along after the prices rise to record levels.

The shortage had been caused by climate protests blocking major fuel depots, exacerbating existing supply issues due to increased demand post-Covid lockdowns and Russia’s invasion of Ukraine.

Here’s everything you need to know.

Why is there a diesel shortage?

Climate activism groups Just Stop Oil and Extinction Rebellion have teamed up to block key terminals across the country to protest the environmental effects of oil and gas.

The action groups said they want to disrupt fuel supplies to London and the South East of England and will continue to do so until the Government agrees to stop all new fossil fuel investments immediately.

Oil pipeline distributors ExxonMobil UK, said the protest, which started on 1 April, shut down three of its terminals as a result.

The protestors were seen gluing themselves to roads and locking themselves to oil drums.

Diesel supplies were already tight, as global stocks of diesel and other middle distillates have fallen to the lowest seasonal level since 2008, due to refinery shutdowns during the start of the pandemic and a rise in demand since.

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Unlike Europe, which is short of diesel, the Middle East usually has a surplus.

But increasing flows to Europe from the Middle East and the US will take time, one trader said, adding that for this reason “for now things will have to stay the same”.

“Stocks of lots of fuels are relatively low, but diesel in particular, in Europe, in the US and in Asia as well,” Neil Crosby, senior oil analyst at OilX, told the BBC.

“The demand for diesel has been very strong up until the crisis, and that also contributed to that. There’s just an imbalance between supply and demand.”

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The war in Ukraine has exacerbated this, due to sanctions placed on Russia.

Russia supplied 18 per cent of the UK’s diesel in 2020, and finding alternative supplies to replace this is very difficult, as many other countries are simultaneously attempting to wean themselves off Russian energy supplies.

A spokesperson for the UK Petroleum Industry Association (UKPIA) told Reuters fuel suppliers are working with the Government to deliver the fuels the UK needs “while adjusting long-term supply routes to reduce reliance on Russian crude oil and oil products”.

Prices have also gone up, meaning some drivers have been filling their cars up as much as they can before the increase further, which is thought to have been impacting supplies.

When will it end?

It’s hard to tell.

The immediate protests have caused a backlog for fuel deliveries which could be resolved fairly swiftly. But international shortages are harder to predict.

The British Retail Consortium – a nationwide trade association said retailers will do “everything they can” to stabilize supplies.

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said: “Retailers are adept at dealing with disruption and will do everything they can to ensure their customers can continue to fill up their vehicles as usual.”

Where can I find diesel?

One trick for finding a petrol station that likely has is good supply is by searching on Google.

If you search petrol stations near you on Google Maps and then click on the individual stations, you can see how busy they are in live time.

If a station has a large bar for the current time and is either busy or busier than average, that means there is likely fuel in stock.

A station that has a small bar and is less busy than usual may be out of fuel.

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To find the most affordable fuel in your area you can use confused.com’s online checker.

Simply select the type of fuel you need and enter your postcode and it will tell you the cheapest stations on your area.

You can then cross-check these with Google Maps to make sure they have supply.

Why have prices gone up?

The cost of filling a family car with petrol was a third higher in March than in 2021, according to RAC’s Fuel Watch.

They also said a diesel car was 40 per cent more to fill.

In the past couple of months petrol and diesel prices have been rising with new records set. Costs have been soaring, thanks to rising oil prices, which in turn determine how much petroleum will be.

The cost of a barrel of oil hit a 14-year high of $137.72 on 8 March.

Edmund King, AA president, said: “Russia’s attack on Ukraine and resulting geopolitical uncertainty has pushed Brent crude above $100 barrel for first time since 2014. This will eventually result in further hikes in prices at the pumps. New record fuel prices are likely anytime soon.”

Oil production is still out of kilter with production as life is becoming more normal with people now driving more again and moving around the world, all of which has caused the oil price to rise.

Oil producers have been struggling to increase output and the Russia situation has caused the price to go higher still.

On top of this, fuel is traded in dollars like oil and the exchange rate is $1.35 to the pound meaning drivers could be looking at a steep incline in costs.

Williams added: “At $120 a barrel – without any change to the exchange rate which is currently at $1.35 – we would be looking at £1.60 a liter and £88 for a full tank.”

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“Average diesel prices at the pumps in Europe are now more expensive than gasoline. This is the first time in history. If the prices go higher, it could force private diesel car owners to reduce driving,” said Cuneyt Kazokoglu, head of oil demand analysis at FGE.

What about Rishi Sunak’s price cut?

The Chancellor announced a 5p cut on fuel duty in his Spring statement, but it came on the same day that oil increased by $6 a barrel, so some say it didn’t make much difference.

RAC fuel spokesman Simon Williams said: “Drivers might well be feeling aggrieved that the chancellor’s ‘historic’ fuel duty cut announced in the Spring Statement just two weeks ago has done nothing to protect them from price increases.

“A 5p cut in duty should, in theory, have led to a 6p cut in prices at the pumps as a result of the government taking less VAT, but that is on the basis that wholesale prices stay still – which is hardly ever the case. – and retailers passing on their reduced costs to drivers fairly.

“The fact pump prices have fallen so little reflects the fact that the cost to retailers of buying fuel had been going up ahead of the Spring Statement.

“Had the chancellor temporarily cut VAT rather than fuel duty on fuel, as we asked him to do, the impact on pump prices would have been immediate with drivers benefitting straight away.

“Cutting VAT would also have gone some way towards shielding drivers from future increases – something a cut in duty just can’t do.


inews.co.uk

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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