The UK government said today that its reserve tanker fleet will be on the road this afternoon to boost deliveries of fuel to forecourts, after a spate of panic buying in recent days caused closures across the country's retail network.
UK business secretary Kwasi Kwarteng said today that "the government's Reserve Tanker Fleet will be on the road this afternoon to boost deliveries of fuel to forecourts across Britain." An October 2017 document from the department for business, energy and industrial strategy (BEIS) on downstream oil supply resilience suggests the fleet is made up of "80 tractor and trailer combinations that can be rented to industry in the event of a severe fuel supply disruption".
Kwarteng clarified that the reserve tanker fleet trucks will be driven by civilians. BEIS announced on 27 September that British Army drivers would be "brought to a state of readiness" and given special training for delivering fuel if called upon. That followed the UK government's move to temporarily suspend competition rules for the UK downstream oil sector, enabling information to be shared and fuel supply optimised between companies.
The UK government may have deployed its reserve fleet and mobilised the army in response to a potential further blow to the HGV driver pool in coming days. Employees at fuel logistics firm Hoyer Petrolog are voting this week on proposed strike action, according to the Unite union.
The government is introducing more measures as fuel shortages at UK forecourts persist. Shortages appear to have occurred in the past week because of mass panic buying in response to a statement from oil major BP on 23 September that a shortage of HGV drivers was hindering the distribution of fuel to its retail network.
Industry sees situation stabilising
Kwarteng also said that "We are now seeing signs that the situation at the pumps has begun to improve with more stations getting more fuel," while a statement from the BEIS — in tandem with members of the fuel industry — stated that "fuel supplies at UK refineries and terminals remain high."
The Petrol Retailers Association (PRA) — which represents independent fuel retailers who have 65pc of the 8,000 forecourts — said that data from a number of its members would indicate that the percentage of sold out or closed forecourts because of shortages had fallen to 27pc from 37pc. Those members operate around 1,200 forecourts.
Another industry body, the UK Petroleum Industry Association (UKPIA), told Argus this morning that "the fuel demand situation on forecourts appears to be stabilising and everyone should continue to buy their fuel as they normally would."
Oil companies report a similar picture. BP told Argus today the situation is improving, but it was not able to provide any fresh estimate on the number of closures from its latest guidance of around a third. But the major said it is still making all its deliveries, and that stocks on the refinery and terminal side remain ample.
ExxonMobil confirmed that a number of the 200 sites Esso operates in collaboration with UK supermarket chain Tesco had been impacted in some way, although the situation "has stabilised and appears to be improving in terms of fuel availability." It also confirmed that fuel production from its 270,000 b/d Fawley refinery has been unaffected and supply to distribution terminals remains strong.
Another large fuels supplier told Argus that it expects the situation to normalise within the week and production and supplies are adequate.
Essar Oil UK — which operates the 204,000 b/d Stanlow refinery — said yesterday that it has reached out to refinery customers and offered additional supply, meanwhile increasing vehicle shifts from around 52 a day in August to 70 now and even 80 by the end of October. Essar told Argus that road fuel sales from the firm's Stanlow, Northampton and Kingsbury terminals were 22pc higher over the weekend of 25-26 September compared with an average pre-pandemic weekend.
The UK's largest fuel distributor Certas Energy said on 28 September that it "faces no shortage of product and we are able to fulfil all orders, however customer demand has increased significantly which has led to some delays in delivery lead times." The firm told Argus today that it is a stable position although it has its own fleet of 900 tankers and drivers, and does not rely as much on third party logistics. Certas supplies fuel to 900 forecourts across the country and operates around 100.
US oil companies Valero and Phillips 66, which operate the UK's networks of Texaco and Jet fuel stations respectively, declined to comment.
Longer term solution?
The surge in fuel demand caused by panic buying is expected to ease off in coming days as more motorists manage to fill their tanks and additional HGV drivers hit the roads following the government's emergency initiatives.
But the government has already announced initiatives to increase the number of HGV drivers until Christmas, which could indicate the HGV driver shortage may remain a problem beyond the short-term fuel crisis. The UK government announced a plan on 25 September to issue 5,000 temporary visas to bring in foreign workers until 24 December, and to accelerate training for up to 4,000 new HGV drivers.
Some figures are questioning how successful that could be. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, noted that "lorry driving is skilled work that requires an expensive licence, and there simply isn't the testing capacity to rapidly increase the pool of qualified drivers. The long hours culture, and arduous working conditions experienced by HGV drivers in the UK are unlikely to suit many older workers, who are more likely to be on furlough than their middle-aged colleagues."
