The Government’s recent decision to defer Revaluation of Business Rates from 2015 to 2017 effectively kills off any hopes of cost reductions harboured by struggling owners of rural filling stations, says Brian Madderson, Petrol Retailers’ Association (PRA) chairman.
"The closure rate for the remaining rural filling stations is now likely to accelerate to over 200 every year," he stressed.
The Valuation Office Agency (VOA) working with the Scottish Assessor’s Association (SAA) produce assessment methods for each category of commercial property which provides the basis of the Rateable Value (RV) for each individual site.
Currently, Rateable Values are based on fuel volumes and margins recorded on 1 April 2008 when the economy was at peak levels. Since then a combination of recessionary forces and alleged anti-competitive pricing by major supermarket chains and certain oil companies has wiped out yet more independent forecourts as fuel volumes and margins have crashed.
Last year PRA, together with Barber Wadlow, produced a report identifying around 500 small, rural filling stations that were at risk of closing their forecourt operations. This resulted from exceptionally high rating assessments that unfairly penalised the smaller operators.
Madderson said: “Government not only ignored our warnings on this matter but has now increased the financial pressures on independent forecourts by offering no prospect of rate reductions for a further four years. The 2015 rating reassessment may have been the ‘last chance saloon’ for many small sites. Without a reduction in their rates bill, they will be unable to invest in their businesses and be forced to close.
“The fuels crisis in March this year featured panic buying, which saw many forecourt stocks drained in a matter of days across the UK. With 6,000 fewer forecourts and low stock levels, Government was rocked by the lack of resilience in our vital supply of retail road fuels.
“As a result, the Department of Energy and Climate Change (DECC) commissioned Deloitte LLP to conduct a study into why so many UK forecourts continued to close and what could Government do to help arrest and reverse this trend.
“Once again, this Government has failed to engage with industry to consider the full consequences of their rates decision. Another ’own goal’ seemingly in direct conflict with the clear need for future fuels resilience, particularly in rural communities.
“It will not be long before the only petrol stations in the UK exist in major towns and cities, eradicating sustainable living in rural areas.”