(Bloomberg) – Gas stations in the south-east of England experienced long lines – and several ran out of fuel – as motorists ran to fill their tanks amid a shortage of fuel delivery truck drivers.
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The UK government, already grappling with a separate electricity market crisis, tried to quell panic buying, as did several industrial groups. In the wake of Prime Minister Boris Johnson’s Brexit project, voters in the country are now confronted with increasing shortages of fuel and food and an increase in the cost of living.
The British unit of BP Plc and Exxon Mobil Corp. previously said a driver shortage is hindering the delivery of fuel to some locations and at least one type is missing from some BP stations. Royal Dutch Shell Plc said it is rescheduling fuel deliveries in the country and that demand has increased at some gas stations.
Several Shell stations in the London area ran out of fuel on Friday.
Queues show that the red lines of Brexit are starting to crack.
Johnson paved the way for a quick fix for the delivery driver shortage, the Financial Times reported.
Windier weather in energy markets, new power cable from Norway to ease UK pressure
Fuel queues highlight Brexit fallout (5:17 p.m. UK)
Boris Johnson’s Brexit project red lines are starting to crack as voters face increasing food and fuel shortages, as well as a sharp rise in the cost of living.
Despite coming to power with a Brexit campaign promising to reduce immigration from the European Union, Johnson and his ministers are now considering what a significant and politically damaging U-turn would be: to use the same EU workers, to address the labor shortage that is crippling parts of the UK supply chain.
Some petrol stations in London with no fuel (5:07 p.m.)
According to Bloomberg journalists in these locations, several Shell gas stations in London and the South East were empty on Friday after the fuel rush.
Shell declined to go beyond an earlier statement saying the company is rescheduling fuel deliveries in the UK amid increasing demand at some of its gas stations. The increase in demand “can in some cases lead to larger queues,” it was previously said.
Regardless, at least 50 of BP’s UK gas station network were missing at least one type of fuel, a company spokesman confirmed. Sainsbury’s retailer said it is experiencing high demand.
No shortage of fuel, says the Autoing Group (2:47 p.m.)
“There is no shortage of fuel and thousands of petrol stations are functioning normally, with few experiencing temporary supply chain problems,” said Edmund King, president of the UK automotive group AA.
“Drivers shouldn’t refuel outside of their normal routine because even if one occasional gas station is temporarily closed, others are open next door,” he added. There are more and more companies at petrol stations on Fridays and on weekends.
UK eases truck driver rules: FT (2:04 p.m.)
Prime Minister Boris Johnson has given ministers the go-ahead to relax immigration rules to allow more foreign truckers into the country, the Financial Times reported, citing an unidentified person familiar with the matter. Johnson gave instructions on how to fix the problem, the person told the FT.
UK retailers warn of Christmas disruption (1:39 p.m.)
The UK is about 90,000 short of truck drivers and if more are not found within 10 days, “it is inevitable that we will experience significant disruption in the run-up to Christmas,” said Andrew Opie, Director of Food and Sustainability for the UK Retail Consortium . This timeframe is important as retailers start building on Christmas supplies in October, according to the group.
The BRC, which represents 170 major retailers from multiple sectors, wants the government to put in place temporary work visas to allow overseas drivers to fill the gap, Opie said.
Energy Crunch Meets British Vegetables (1:33 PM)
The cost of growing UK young tomatoes, cucumbers and peppers is rising, the latest example of how the energy crisis is rocking the country’s food sector.
The vegetable is not suitable for growing in the UK climate but can thrive in heated greenhouses. As the current season for growing crops like tomatoes draws to a close, farmers will soon be putting seedlings in for next year’s harvest, according to Nigel Jenney, head of the Fresh Produce Consortium.
Of particular concern is the recent rise in gas costs, as young plant greenhouses need to be heated over the winter before it gets warmer. The soaring energy bills are “a huge additional burden” for growers, and some may cut or delay planting, Jenney said.
Miners See Long-Term Impact of Energy Crisis (1:21 p.m.)
The unprecedented surge in electricity prices will hit miners for years to come as new long-term contracts take into account current levels, said a manager at Swedish miner Boliden AB. The company has just signed a new 15-year agreement to supply a cabin in Norway that is currently being modernized.
âSooner or later, contracts have to be extended. However they are written, the market situation will hurt you at some point, âsaid Mats Gustavsson, Vice President for Energy at Boliden, in an interview. “Of course, when you’re exposed to the market, the operating costs have increased.”
Some Esso stations are still affected (12:34 p.m.)
A small number of Esso-branded pumping stations are still in some way affected by the disruption to UK fuel supplies, an Exxon spokesman said.
The affected stations are part of the Tesco Alliance business of 200 stations, which means that there is a Tesco shop on the website. Exxon arranges the fuel supply for the Tesco Alliance branches. There are an additional 1,000 Esso branded websites in the UK, but they are served by other companies.
Large queues at gas stations (12:25 p.m.)
Fuel is still available – while you are willing to wait. By lunchtime in Ashford, Kent lines had formed in front of the Esso and BP branches, while a much longer line of traffic had formed in front of Tesco Extra on the outskirts.
A similar picture was seen in West Wickham, southeast London, where the line of drivers waiting to refuel at a Shell store blocked traffic.
Shells sees tight gas market by 2025 (12:02 p.m.)
Shell expects the global natural gas market to remain tense through 2025, according to a note from Jefferies citing a sell-side event with the company.
Shell said the pricing environment for fixed-term contracts is improving and “it’s back to a sellers’ market” as buyers recognize the importance of stable, reliable long-term supply, the press release said. Shell has geared its business to capitalizing on attractive gas market fundamentals, but current conditions are more extreme and have moved faster than expected.
Drivers shouldn’t worry about running out of fuel: RAC (10:57 am)
“Drivers shouldn’t worry about running out of fuel,” said Simon Williams, a spokesman for the automotive services company RAC. “There are plenty of forecourts left with plenty of fuel.”
Separately, retailer Sainsbury’s has said that fuel has not been cut at its gas stations.
Driver Shortage Isn’t Just Due To Fuels, Says Oil Industry Group (10:52 a.m.)
The shortage of truck drivers that has caused some UK petrol stations to run out of fuel “is not only seen in the downstream sector but across the economy,” said a spokesman for the UK Petroleum Industry Association.
“The fuel is currently reaching the vast majority of consumers,” he said. “The industry will continue to work to ensure that it stays that way.”
UK fuel traders see large stocks (9:57 a.m.)
Fuel retailers downplayed the extent of the disruption from the shortage of truck drivers, saying that temporary delivery delays will be confined to one region and very few stations will be forced to close.
“Total gas station failures have been rare, so the resilience of retail fuels is not in question,” said Gordon Balmer, executive director of the Petroleum Retailers Association, in a statement emailed. “Some websites confirm delayed deliveries,” but “all problems appear to be limited to London and the South East and are inherently temporary.”
Iberdrola Boss Says Energy Crisis Will Normalize In 5-6 Months (9:55 AM)
The energy crisis in Europe and the UK is fueled by the price of gas and the situation will normalize in five to six months after a price decline, Iberdrola CEO Ignacio Galan told Bloomberg on Friday.
The Spanish company, which owns Scottish Power, says utilities will keep supplies to UK customers as the failure of small suppliers forces millions of customers to switch providers: Galan.
The rise in carbon prices is not responsible for the energy crisis, Galan said, adding that Europe is committed to its decarbonization strategy and the energy crisis will not derail it.
Britain could ease visas, deploy soldiers to address driver shortage (9:07 a.m.)
The UK government is “moving heaven and earth” to address the problem, Transport Secretary Grant Shapps told BBC Radio on Friday. “We will do everything we can to ensure that there are enough drivers.”
A driver shortage has already resulted in supermarkets unable to fill their shelves across the UK.
When asked specifically if soldiers could be driving tankers if supplies continue to be hit, Shapps told BBC Breakfast, âOn things like whether the military has a role, if there is a role, of course we will if this actually helps. â
Windy weather, new cable (6 a.m.)
It’s not all bad news for UK energy supplies. The wind will be blowing again next week and a few weeks later, and the world’s longest submarine cable will deliver Norwegian electricity from October 1st
These are helpful developments, but they are nowhere near enough to resolve the underlying UK energy crisis
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