As I write this column, our downstream oil industry in the UK is on the threshold of a new relationship with government, one which we sincerely hope heralds meaningful change.

On April 9, the Department of Energy and Climate Change published its review into the refining and fuel import sectors in the UK.

The review highlights the economic benefit of our indigenous refining industry in the UK and identifies it as a major strategic component of the nation’s secure supply of oil products, both now and in the future. The review also commissions a joint government and industry Midstream Oil Task Force to help address some of our industry’s challenges.

However, much more work must be done in order to fully address many of the wider legislative issues affecting our sector in the UK and its ability to compete effectively in today’s global market.

Our primary oil supply infrastructure in the UK is a strategic asset. Domestic refineries provide flexibility in the product supply chain, especially in the event of an unexpected supply disruption, and ensure a balance with imported product to optimise the country’s oil product energy security. If one or more refineries were to close, the UK would be left more exposed than it currently is to the international refined product market. This is particularly valid for those products already at high risk, such as jet fuel and diesel, as outlined by an IEA-based evaluation of national energy security risks and resilience (IHS Purvin & Gertz 2013).

It is for this reason that UKPIA calls for firm and measurable action from DECC and the Task Force going forward. Firstly, a firm and urgent commitment to reforming policies and legislation (both UK and EU driven) that create a cumulative burden on industry, and undermine its capability to compete within the EU and globally, with the aim of re-levelling the international playing field. Secondly, a coherent forward process to address the cumulative and sometimes overlapping burden of legislation, along with a clear legislative scope and timeframe.

UKPIA stands ready to work with government via the Task Force and looks forward to lending its support in achieving urgent and measurable actions for our downstream oil industry.

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