Why is there a fuel shortage? What we know about diesel supply problems at UK service stations

Drivers face tough times after fuel supply problems came after prices hit record highs.

The problems were caused by climate protests block major fuel depotsexacerbating existing supply issues due to increased demand following the Covid shutdowns and Russia’s invasion of Ukraine.

However, the Department for Business, Energy and Industrial Strategy (BEIS) has urged people to continue buying fuel as usual.

A BEIS spokesperson said: ‘All fuel supply points are fully operational and we are working closely with industry to ensure supplies are maintained. The public should continue to buy fuel as usual.

Is there a diesel shortage?

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

The action groups have said they want to disrupt fuel supplies to London and South East England and will continue to do so until the The government agrees to immediately stop all new investment in fossil fuels.

Pipeline distributors ExxonMobil UK, said the protest, which began on April 1, has closed three of its terminals as a result.

Protesters were seen sticking to roads and locking themselves in barrels of oil.

Diesel supplies were already tight as global inventories of diesel and other middle distillates fell to the lowest seasonal level since 2008, due to refinery shutdowns at the start of the pandemic and an increase in request since.

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Unlike Europe, which lacks diesel, the Middle East generally has a surplus.

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

“Fuel batch inventories are relatively low, but diesel in particular, in Europe, the US and Asia as well,” Neil Crosby, senior oil analyst at OilX, told the BBC.

“The demand for diesel was very strong until the crisis, and that also contributed to that. There is just an imbalance between supply and demand.

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

Russia supplied 18% of the UK’s diesel in 2020, and it is very difficult to find alternative sources of supply to replace it, as many other countries are simultaneously trying to wean themselves off Russian energy supplies.

A spokesman for the UK Petroleum Industry Association (UKPIA) told Reuters that fuel suppliers were working with the government to provide the fuels the UK needed “while adjusting long-term supply routes to reduce dependence on Russian crude oil and petroleum products”.

Prices also increased, meaning some drivers filled their cars as much as they could before the increase continued, which would have impacted supply.

When will this end?

It’s hard to say.

The immediate protests caused a backlog of fuel deliveries that could be resolved fairly quickly. But international shortages are harder to predict.

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

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “Retailers are resilient to the disruption and will do all they can to ensure their customers can continue to stock up on their vehicles as usual.”

Where can I find diesel?

One trick to finding a gas station that likely has a good supply is to do a Google search.

If you search for gas stations near you on Google Maps and then click on individual stations, you can see how busy they are in real time.

If a station has a large bar for the current time and is busy or busier than average, it probably has fuel in stock.

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

To find the most affordable fuel in your area, you can use Confused.com Online Checker.

Just select the type of fuel you need and enter your postcode and it will show you the cheapest stations in your area.

You can then check them with Google Maps to make sure they are stocked.

Why have the prices increased?

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

They also said that a diesel car was 40% more to fill.

Over the past two months, gasoline and diesel prices have been rising and new records have been set. Costs have skyrocketed, thanks to rising oil prices, which in turn determine the amount of gasoline.

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

Edmund King, AA President, said:Russia’s attack on Ukraine and the resulting geopolitical uncertainty pushed Brent above $100 a barrel for the first time since 2014. This will eventually lead to further pump price increases. New record high fuel prices are likely to come soon.

Oil production is still out of step with production as life returns to more normal, with people again driving more and more and moving around the world, which has driven up the price of oil.

Oil producers are struggling to increase production, and the situation in Russia has pushed prices up even further.

On top of that, fuel is traded in dollars like oil and the exchange rate is $1.35 to a pound, which means drivers could be looking at a steep increase in cost.

Williams added: “At $120 a barrel – with no change to the exchange rate which is currently $1.35 – we would be looking at £1.60 a liter and £88 for a full tank.”

“Average diesel prices at the pump in Europe are now more expensive than petrol. This is the first time in history. If prices rise, it could force owners of private diesel cars to reduce their driving,” said Cuneyt Kazokoglu, head of oil demand analysis at FGE.

What about Rishi Sunak’s price drop?

The Chancellor announced a 5p fuel tax cut in his spring statement but it came on the same day that oil rose by $6 a barrel so some say it didn’t a lot of difference.

RAC fuel spokesman Simon Williams said: ‘Drivers may well feel aggrieved that the ‘historic’ reduction in fuel duty announced by the Chancellor in the Spring Statement just two years ago weeks did 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 pump because the government levies less VAT, but that’s on the basis that wholesale prices stand still – which is almost never the case – and retailers fairly passing on their cost reductions to drivers.

“The fact that prices at the pump have fallen so little reflects the fact that the cost to retailers of buying fuel had increased prior to the spring declaration.

“If the Chancellor had temporarily reduced VAT rather than fuel taxes, as we asked him to do, the impact on prices at the pump would have been immediate, with drivers benefiting immediately.

“Reducing VAT would also have helped to protect drivers from future increases – something a reduction in duty simply cannot do.

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