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UK moves to ease fuel shortages as panic buying dries up more pumps

Highlights

Govt exempts sector from competition law, offers visas to foreign drivers

Some two-thirds of pumps run dry as fuel demand surges

BP says over 30% of its pumps are out of two main fuel grades

UK refiners and fuel retailers were struggling to restock fuel stations on Sept. 27 after panic buying drained most of Britain's pumps and the government outlined moves to ease the impact of a lack of drivers needed to resupply retail sites.

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The Petrol Retailers Association, which represents 65% of independent forecourts, on the weekend said two-thirds of its nearly 5,500 member sites were out of fuel. Queues continued outside many UK fuel stations on Sept. 27.

A BP spokesperson said about a third of its 1,200 fuel stations are out of the two main grades of fuel on Sept. 26, with that number now likely to be higher.

Shell said some of its sites were running low on some grades but declined to comment on specific numbers.

However, no disruption to refining operations or wholesale fuel logistics has so far been reported further up the supply chain.

"Fuel stocks remain normal at refineries and terminals although deliveries have been reduced due to the shortage of HGV drivers," the Petrol Retailers Association said in a statement. "We will watch carefully for a possible easing of demand and normalizing of forecourt stocks over the coming days."

UK refining industry association UKPIA said fuels are continuing to be delivered to pumps to replenish stocks despite the demand surge on the weekend.

On the weekend, the UK government announced it would temporarily exempt the energy industry from competition laws, allowing companies to share information and prioritize deliveries to areas most in need of fuel supplies. It also said it would offer temporary visas to 5,000 foreign fuel tanker and food lorry drivers and 5,500 poultry workers in a bid to limit supply disruption ahead of Christmas.

However, there are currently no plans to bring in the Army to drive tankers to help resupply the pumps, the BBC cited the environment minister George Eustice as saying.

Demand recovery

In the last week of August, the UK's road fuel sales had recovered to 94% of pre-lockdown levels, according to last weekly data released by the UK's Department for Business, Energy and Industrial Strategy. Sales of gasoline and diesel in the week to Aug. 29 averaged 16,545 liters per fuel station, according to the data, with both diesel and gasoline at 92% and 96% of pre-crisis sales, respectively.

The country's gasoline sales averaged about 300,000 b/d in 2019, while diesel sales averaged about 550,000 b/d, according to estimates by S&P Global Platts Analytics.

The UK, Europe's second-biggest economy, should see its total oil demand recover fully to around 1.55 million b/d by year-end 2021, according to Platts Analytics.

The truck driver shortage spans multiple sectors and has been attributed variously to a Brexit-induced lack of EU labor, the pandemic and issues processing applications for heavy goods vehicle licenses, among other causes.

The UK's Road Haulage Association has estimated that about 20,000 European drivers have left the UK since the country's exit from the European Union, bringing the total shortage to 100,000.