Here at PetrolPrices, we can often be controversial, we have been known to “stir the pot” but today in this article we want to debunk some of the myths that are floating around about fuel shortages. You may have heard on the radio, in the news or even our very own Kitty Bates speaking on BBC Wales about it, and we just wanted to share that message with you.
It is worth noting that this is just us using facts and common sense to piece together the puzzle and come to a conclusion that we hope can help to dispel some of Project Fear!
Over the weekend, it is thought that a former minister leaked a document entitled “Operation Yellowhammer” to the press, which covered a lot of scenarios, some more worrying than others in the event of a no-deal Brexit.
Some media outlets are disputing this and saying it is a realistic expectation of what could happen with a no-deal Brexit, however Michael Gove, whether you agree with him or not, claimed the paper to be out of date, something that was later dispelled by the government and shown that it was written on the 1st August.
Mr Gove, speaking to the BBC, said “It’s certainly the case that there will be bumps in the road, some element of disruption in the event of no-deal.
“But the document that has appeared in the Sunday Times was an attempt, in the past, to work out what the very, very worst situation would be so that we could take steps to mitigate that. And we have taken steps.”
What does Operation Yellowhammer say about fuel?
In this we want to specifically focus on fuel, being PetrolPrices.com. The document leaked to the Sunday Times states two issues that could be a potential problem for the UK. The first is traffic disruption due to checks at the border which could limit supply to London and the South East.
The second issue is due to the zero per cent petrol import tariffs reducing competitiveness in the market, something that is shown by the industry. “The concern is that this is a unilateral decision by the government and overnight we go from being on a level playing field with European competitors to being totally uncompetitive,” one source said. “It will have a major impact on domestic petroleum manufacturers.”
Back in March, the government announced that on 87% of imports the import tariff would be set to 0% to ensure that everyone could still afford fuel which is now something multiple government sources are investigating as a risk to GDP. This is down to the uncompetitive prices UK imports would have in comparison with the rest of the EU market.
However, all of this still doesn’t mean fuel shortages, at least not long term. With the whole situation regarding Brexit, there will a time of uncertainty and this has been known for a long time and should be expected.
Piecing it all together
If we break down where the UK gets our oil from the vast majority comes from non-EU namely Russia and OPEC. Only 8% of all UK fuel is from EU countries, so if we can’t get it from the EU, it would not be long before another area upped the supply. Similarly, if fuel is less competitive to sell into Europe, then there could be potential for it to be sold in the UK.
Alongside that UK oil consumption has been decreasing year on year since 2013, as electric vehicles and hybrids come into play and as cars become more and more fuel-efficient. In reality, it’s probably not going to be long before that extra 8% we currently get from the EU is no longer needed as people convert to Alternatively Fueled Vehicles (AFVs).
While yes, there may be some inflated prices for a month or so, or perhaps some delays, we really think that a lot of the fear surrounding this is just the last chance to hype up Project Fear before the 31st of October.
Jason Lloyd, Managing Director of PetrolPrices.com says “The impact of a no deal Brexit on fuel supply across the UK is likely to be temporary as retailers adjust and source supplies from different sources. According to the Office for National Statistics, the UK imports about 9% of its petroleum from Sweden and the Netherlands, all other imports into the UK come from Russia or OPEC countries. ”
“Should petroleum from any country get stuck at the UK border, I would expect the 7 UK refineries and North Sea pipelines to increase the supply of petroleum from non-EU sources to offset the loss, but that would cause a few weeks temporary disruption.”
Do you think there will be fuel shortages nationwide? What do you think will happen on the 31st? Let us know below