Forecourt Trader - 30 years at the heart of the fuel retailing community

Fuel gazing

01 July, 2004
Enough oil for 50 years, but green issues will prevail, says UKPIA report
Page 22 
For those fuel retailers concerned about the future of the petrol retailing business, the new report from the UK Petroleum Industry Association has sought to reassure them that for the next 50 years at least, there’s more than enough oil to go round for all transport energy needs.
The report, entitled Future Road Fuels, says the UK oil refining industry, processing crude oil from a number of different sources (domestic and overseas), has and will continue to provide the UK with a secure, lasting, reliable and economic source of transport fuels and other products.It explains that conventional fuels created from crude oil have been in production for more than 100 years, and there is currently 40 years of supply left (at current rates of consumption) from conventional crude alone, with oil still being discovered. And as North Sea oil declines, it will be replaced by crude oil from Africa and the Caspian region which will improve the diversity and security of supply to UK refineries. The proportion from the Middle East is expected to remain unchanged.However, before we all think, ‘great, let’s carry on as normal’ there is a strong environmental agenda that will – and has already been – the main driver for change. The Government’s CO2 reduction targets are for the UK to be on the path for a 60 per cent reduction by 2050, with real progress by 2020. The reductions are based on 1990 levels of emissions. Under the Kyoto Protocol the Government is committed to a 12.5 per cent reduction in greenhouse gases by 2008/12 and a national goal of CO2 reduction of 20 per cent by 2010.While 50 per cent CO2 reductions are potentially available from conventional fuelled vehicles – a recent study predicted that the fuel economy of these vehicles could be doubled by 2020 from the use of improved hybrid technology – it is thought the Government’s goal of reducing CO2 emissions from road transport by 60 per cent by 2050 will be much harder to reach. This is because the increased demand for mobility and further improvements in conventional technology beyond 50 per cent are unlikely. Therefore, according to the report, a gradual movement away from fossil fuel technology will probably be required, with low carbon or renewable sources of energy such as biomass, wind, solar and perhaps nuclear power ultimately being utilised to provide some of the requirements for transport fuels. The timing and size of the shift away from petrol and diesel will depend on the effect of other measures such as changes in behaviour (vehicle choice and use), and traffic management.CONVENTIONAL FUELSThe fuel economy of new cars sold in the UK and the EU is steadily improving, which is reflected in the reduction in average emissions of carbon dioxide from both new cars and the whole UK car and van parc – and also in the fact that demand for petrol and diesel has been virtually static since 1997, despite the fact demand for road travel is growing and continues to do so – it is predicted to rise by 28 per cent between 2000 and 2020. Sales of petrol have been falling since reaching a peak in 1990 of 33 billion litres; while sales of diesel have been steadily increasing for the past 20 years and currently represent around 44 per cent of the road fuel market by volume. The growth in diesel is accounted for by increased freight on the road, better mpg, and diesel cars have improved so are more popular with consumers.The Ricardo study for the UK Government suggests that considerable improvements are still possible with conventional technology. This would include introducing more efficient High Compression Diesel (HDi) engines; stop-start technology; new transmissions systems and electronic assistance of manual gearboxes as well as reductions in vehicle weight.“Further efficiency improvements could arise from progressive hybridisation of vehicles,” says the report. “This will begin with the introduction of regenerative braking, with energy stored in larger high-voltage batteries, and will proceed to parallel hybrid vehicles, in which an electric motor is used in conjunction with the diesel engine. The final step in improving conventional cars could come from heat recovery from exhaust gases.” ALTERNATIVE FUELSNatural gas is favoured by the European Commission as a means of reducing Europe’s dependence of imported fossil fuels for transport. However, in the medium/long term, the bulk of both natural gas and crude oil will be imported, which will reduce the attractiveness of natural gas in maintaining security of supply. The development of a natural gas infrastructure would be an expensive undertaking – for the consumer who would have to buy more expensive vehicles; the motor manufacturers who would have to develop them; the Government as consumers might expect the current low rate of duty to be maintained; and the fuel suppliers who would have to install a distribution system before there was a real market for the product.Biofuels could contribute to CO2 reductions from transport if their high cost of production is reduced or if environmental, social and economic benefits justify support from the Government under the Alternative Fuels Framework. In the long term, however, the report states that hydrogen may have a major role to play in supplying low carbon transport energy supply. “In theory hydrogen can be produced from any primary energy source, putting little limit on its availability, although not all sources offer the low-carbon emissions currently being targeted. In the long term hydrogen produced from natural gas would be used to introduce fuel cells to the market although this would result in increased CO2 emissions. Hydrogen has the potential for truly carbon-free transport energy, although it is currently more expensive than crude oil products or biofuels and is unlikely to become a significant source of transport energy before 2030. In the short term there is also the potential for hydrogen to be used with internal combustion engines.”However the report warns that future options will only be successful if consumers adopt them. “Experience in a number of countries has shown that consumers will seek a lower fuel price to compensate for any loss of ‘amenity’, such as boot space, lower range etc, before they adopt new technology. This has often been driven by duty subsidies in the past. However, when such subsidies are removed and the pump price rises, sales of alternative fuels decline.”For the time being then, it seems the traditional petrol retailing business is safe in the knowledge that motorists will still need traditional forecourts to fill up with petrol and diesel. After all, after 100 years people have grown quite comfortable with the concept. Importantly, the distribution infrastructure for conventional fuels is already in place and consequently less investment is required in order to supply fuels to customers than is required for alternative fuels.Therefore, as the report states: “Conventional vehicle and refuelling technology will be the benchmark against which alternative fuels and vehicles will be evaluated.”



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Weekly retail fuel prices: 18 September 2017
RegionDieselLPGSuper ULUL
East120.75128.55119.84
East Midlands120.29128.81119.63
London120.7558.57130.05119.82
North East120.2059.90129.98119.40
North West120.52128.62119.81
Northern Ireland119.2369.90126.85119.03
Scotland120.60128.18119.75
South East121.03130.63120.24
South West120.75129.31119.96
Wales120.35127.44119.57
West Midlands120.4262.90130.69119.84
Yorkshire & Humber120.1971.90128.67119.59

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