Long queues of vehicles lining up for scarce supplies of diesel and petrol , empty fuel pumps, rising oil prices, and instances of selfish, aggressive, and otherwise irrational behaviour on the forecourts of petrol stations and beyond, were last seen on a nationwide scale in the UK during the early 1970s, and on a smaller scale in 2000 . Scenes from the past have come to haunt us yet again in late September 2021, along with reports of spikes in sales of jerry cans for the stockpiling of oil (as reported by Halfords) and of increasing breakdown calls occasioned by the inadvertent substitution of petrol for diesel and vice versa (according to the AA).
Back in 1973, there was a clear cause for the crisis. A so-called Oil Shock was administered to the British economy when the oil-producing member nations of OPEC both restricted supplies and increased prices of crude oil. That particular oil embargo affected America the most and was led by Saudi Arabia in response to Western support for Israel during the Yom Kippur War. In 2021, however, there seems to be a diversity of opinion about the underlying causes, especially with regards to the relative importance of Brexit as a root cause of the nation’s problems. It thus seems an opportune moment to delve into the underlying issues to obtain a clearer picture.
The oil supply chain within mainland Britain begins at the six major coastal petroleum refineries (four in England, and one each in Scotland and Wales), which deliver around 85 per cent of the nation’s fuel demands. Crude oil is delivered to these refineries by oil tanker ships. This supply comes both from oil fields in the UK North Sea Continental Shelf and as imports from other oil-producing nations, with Norway being the main supplier, followed by the US and Russia. Crude oil is then processed in these refineries, resulting in the production of diesel, petrol, aviation fuel, liquefied petroleum gas (LPG), important by-products (such as naphtha), and petroleum products for domestic use (petroleum jelly, paraffin wax). According to both the UK Petroleum Industry Association (UKIA), which operates the oil refineries, and the Secretary of State for Transport, Grant Shapps, supplies of fuel are not an issue at present. While there are no immediate threats to fuel production, Essar Energy UK, owner of the Stanlow oil refinery in Ellesmere Port, Cheshire-supplier of a sixth of Britain’s road fuel-is negotiating with HMRC over repayment of a deferred £223 million VAT payment, with some reports of the company being on the “brink of collapse”.
The nation’s fuel is then delivered by HGV drivers in fuel tanker vehicles to the forecourts of petrol stations. This is where the impact of a chronic shortage of HGV drivers has led to reduced supplies for public consumption. This shortage has been attributed to a combination of factors: the post -Brexit exodus of EU drivers, as well as a declining British workforce (ageing drivers; lack of appeal to younger entrants) and a lack of incentives to recruitment (uncompetitive pay; new IR35 tax rules; poor working conditions, including long and unsocial hours of work and inadequate facilities for overnight stops while on the road).
The driver shortage has been highlighted for some time by the Road Haulage Association, which represents long-distance hauliers, but to little avail. The impact of fewer than required HGV drivers was only felt gradually to start with, as lockdown was lifted and the nation’s roads filled up with cars and other vehicles . A state of precariously balanced supply and demand has, however, been disrupted by a surge in demand. So-called “panic buying”, in some cases even justifiable-as in the case of drivers of ambulances and public service vehicles (lorries), certain keyworkers, as well as self-employed people dependent on their cars for their livelihoods (delivery and taxi drivers)-has tipped the balance, mainly the result of a remarkable, but by no means unusual, outburst of selfishness among those citizens for whom a full tank of diesel or petrol need not be a priority at this particular time. This panic buying first broke out on 23 September 2021, believed by some, including Brian Madderson, Chairman of the Petroleum Retailers Association, to have been driven by the leaking of a confidential BP report to a Cabinet meeting on 16 September. Whatever the reason, the ensuing surge in fuel purchases has inevitably disrupted an already fragile system that is easily prone to disruption.
The government’s response to the crisis has met with some criticism. The announcement of five thousand temporary visas for EU-based drivers as a stopgap measure has been met with contempt from their representative organisations and also been criticised by British trade unions. This means of adding to the workforce is unlikely to be a quick fix, given all the bureaucratic obstacles to be overcome before implementation and the likely inability to fill the vacancies. A shorter-term solution may involve the use of British Army tanker drivers, the Army accordingly being on standby. Unfortunately, none of these solutions can ensure immediate mitigation. In times of crisis, citizens’ own responsible use of fuel is crucial to support the wider economy.
It maybe that this present crisis will challenge existing transportation practices and further hasten our transition to a greener economy, as we learn to rely less and less on fossil fuels to transport people and goods. Once again, we will have to sit back and watch helplessly as events play out in front of us, as the nation’s leaders hopefully take stock and act appropriately and in our best interests.
Ashis Banerjee