Thursday, October 21, 2021

Fuel shortages: Will extra petrol make a difference?

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Image copyright Getty Images Image caption Tesco and Morrisons were hit particularly hard

The UK government has asked the competition regulator to temporarily suspend their merger consent order to ensure more petrol is available in the country.

In a letter to the Competition and Markets Authority (CMA), the Department for Business, Energy and Industrial Strategy (BEIS) said the move was to ensure retailers could quickly respond to “increased pressures”.

It comes after statistics showed petrol shortages had also worsened during the closure of a BP refinery in Whiting, Indiana.

Last week it emerged an economic “crisis” had emerged in some parts of the country.

This has put pressure on supermarkets to make sure supplies keep flowing, say experts.

National statistics, including those from AA Driving Survey, show almost seven in 10 people in the UK are paying more for their fuel than in October last year.

Areas which have been affected include Wales, North West, West Midlands, West Country, North East, East Midlands, Yorkshire and the Humber, Scotland and Northern Ireland.

The BEIS did not spell out what it wants the CMA to do next.

In their letter the Department also said it was working with Tesco and Morrisons in particular to ensure that “fuel availability matches the increase in fuel demand in the market”.

A CMA spokesperson said: “We are responding in due course.”

What happens next?

It is a crucial issue, as people prepare for this weekend’s festivities.

If the CMA does not find that the sale of more petrol is being matched by an increased supply, then there could be a risk of the price remaining high.

This would increase the number of motorists failing to pay bills.

The CMA has two options if it does find that there is not enough petrol.

It could revoke the BP ruling, which would allow Tesco and Morrisons to sell more fuel.

Or it could raise the limit on the number of fuel stations any retailer can own.

In theory this would cause prices to drop at the pumps.

Read the statement from the BEIS

“Motorists face Christmas gasoline panic buying,” said John Wood, of fuel monitoring firm JRB.

“It’s not the first time we’ve heard this, but we need to see action if we’re to keep driving with confidence and avoid yet another fuel crisis at the wheel.”

Coupled with the closure of three BP refineries earlier this year, UK fuel supplies have come under intense pressure in recent months.

The Whiting refinery was one of three refineries which were closed in the US

Prices have been pushed up by the change of fuel blend in the country, as more expensive diesel and petrol has been added to the mix.

It comes at a time when diesel already costs 10p more a litre than petrol.

Also, the good news for motorists is that fuel prices fell overnight in both Wales and Wales and London.

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