UK autogas shortages linked to refinery maintenance

Autogas shortages have emerged in the UK after domestic refinery maintenance that started around March. A prominent consumer body said this has amplified the effects of Shell's withdrawal from the LPG retail sector last year.

Industry association Liquid Gas UK acknowledged a supply issue "in some regions of the UK… a result of maintenance at some UK oil refineries resulting in reduced levels of propane produced. It is hoped this issue will resolve itself in the coming weeks."

The UK's refinery utilisation was up to 67pc in April from 53pc in March but remained below the European average, according to data from Euroilstock and Argus research.

ExxonMobil's 270,000 b/d Fawley refinery, which constitutes around 22pc of the UK's total capacity, restarted one of its units on 3 June after a nine-week maintenance. Valero's 210,000 b/d Pembroke refinery was also under maintenance during March and was only recently partially restarted. The Petroineos' 210,000 b/d Grangemouth has been operating below capacity for some time since mid-April, after cutting 130 jobs to reduce operating costs.

The shortage of product has notably affected LPG-fuelled taxis, especially in the Greater London region, with that sector's industry body the Licensed Taxi Drivers' Association (LTDA) reporting sporadic supply. Some 24 stations within London's M25 orbital motorway have LPG pumps but are struggling to meet demand, and LTDA said that this problem could get worse as some taxi drivers have yet to return to work after the end of travelling restrictions.

The LTDA said that shortages have been an issue since October 2020, when Shell removed all LPG pumps in the UK because of falling demand and prohibitive compliance costs.

"Demand for [autogas in the UK] has declined owing to changing customer preferences and increasing availability of other lower-carbon fuels, meaning many of the autogas sites were increasingly underutilised," Shell said at the time.

Taxi owners were incentivised to convert their vehicles to operate on LPG in 2018, when the Mayor of London and TfL announced plans to invest £24mn ($34mn) to help the capital's 'black cab' drivers switch to alternative fuel vehicles.

"Many drivers invested in converting their taxis in good faith-but are now struggling to find a reliable supply of fuel, often having to travel long distances to the find a service station with LPG, and even then they may find that the supply has run out when they arrive," the LTDA said. "The situation is becoming extremely challenging for the drivers and undermining the viability of these vehicles, despite the fact that they still have a number of years left on their licences."

The LTDA is trying to secure a dedicated supply of LPG pumps for taxi drivers in central London to ensure reliable supply.

By Efcharis Sgourou