Some fuel stations are currently facing temporary shortages, according to statements made by Allan Leighton, the executive chairman of Asda. He mentioned that the recent Iran conflict has affected fuel supplies at a time when demand from drivers has surged. Leighton explained that while fuel volumes have significantly increased, the supply has struggled to keep up with the demand, leading to sporadic shortages. Asda, the UK’s second-largest fuel retailer with 320 forecourts nationwide, has experienced issues at a few of its petrol stations.
The upcoming Easter holidays are expected to further escalate the demand for fuel as millions of Brits plan road trips and staycations. This surge in travel is anticipated to peak over the Easter weekend, resulting in busy roads and forecourts. The government has advised drivers against panic buying and excessive fuel hoarding despite a few stations reporting running out of fuel.
While there have been reports of fuel availability issues at some forecourts, the overall fuel supply situation in the UK remains stable. Industry experts have reassured that companies are closely monitoring the situation to ensure stability in the fuel supply chain. Imports of crude oil, which are used to produce petrol in the UK, mainly come from the US and Norway, with a small percentage from the Middle East.
Concerns have been raised about a potential decline in diesel supplies starting mid-April as stocks purchased before the Iran conflict deplete. Contingency plans for fuel rationing are being prepared in case of prolonged disruptions in oil supplies from the Middle East. The UK government has been alerted about the looming challenges in diesel imports.
The increase in oil prices following the Iran conflict has led to a spike in pump prices, with the average cost of unleaded fuel reaching 150p per litre and diesel approaching 180p per litre. Industry experts warn that if the Middle East conflict continues, food prices could also rise due to increased fertilizer costs for farmers.
Asda reported a decline in profits last year but highlighted a return to sales growth as it invested in price reductions. Amidst the current challenges, Allan Leighton emphasized the need to keep prices low to mitigate the impact on consumers. The government’s plans to incrementally raise fuel duty have faced criticism, with concerns about the potential impact on consumers.
In light of the ongoing situation, the government is closely monitoring the VAT revenue generated from fuel sales during periods of price hikes, aiming to balance any potential impacts on consumer spending.