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

Making a power point

Top 50 Indie Patrick Sewell, managing director of Yorkshire-based Sewell on the go, echoed the feelings of many retailers when he expressed confusion about implementing a future fuels plan at last month's ACS Forecourt Conference in Leicester.

"It's very challenging," said Patrick, who is also the main board chair of the ACS. "At the moment in my business the problem is not having a plan I don't feel I can do anything. I'm beholden on who I get information from, and how I can activate something, so at the moment I feel like I'm totally in limbo. I'm not burying my head in the sand, but I see so many confusing messages, so I can't act upon it at the moment."

There had already been an audience vote earlier about when people thought electric cars would become the 'norm', with most generally signalling 'within 10 years'.

Tom Callow, director of communications and strategy at BP Chargemaster, said: "Nobody knows we could produce several graphs, all showing a different timescale. We do know that consumer demand is currently outstripping supply for electric cars, but it is a transition there isn't the resource to make it happen tomorrow.

"There is a perception that there needs to be a massive rush to adopt EV charging overnight, but I don't think that's true. My message is 'don't panic, there is no rush'. It's about gradual transition and making sure you move at the right time with the right solutions and when you're comfortable to do so. Assess the market, speak to the EV operators. There are companies knocking on your door asking you to sign 15-20 year leases but I don't think that's the right way to go. This is a transition, it's not a massive leap off a cliff."

Dale France, strategy analyst at BP Retail, said the transition would be slow: "The key factor for future demand is what vehicles are being sold today that indicates what fuel they will buy tomorrow. Currently just over 6% of car sales are alternative fuel, and only 1% are EV. The average lifespan of a vehicle is between eight and 11 years. If we sell a vehicle in 2040, it's still going to be around in 2050. There will still be demand for normal fuel from a normal forecourt albeit at a much lower level.

"Since 2002 we've seen an average of 15% decline in mileage so we use this to understand fuel demand. The number of people under 25 with a driving licence is also in decline. Young people don't see driving as a necessity it's not just about cost but about using alternative forms of transport. Yes there will be a decline in fuel volumes but overall we see it as a 2% decline year-on-year up to 2040. That's driven by the type of vehicles that are out there, and the number of miles being driven, but the key factor will be the efficiency of those vehicles. If we take the estimate of a seven-year growth rate on alternative fuel (which includes hybrids) that takes us up to 2030 before all vehicles are alternative fuel.

"The more reasonable transition estimate suggests 2040 consumers are going to hold off until they know where this is going."

James Spencer, managing director of oil specialist the Portland Group, had a contrary view he believes EVs will become the norm within five years. He said VW and 'dieselgate' killed off the diesel car far better than any legislation could have done, and as a result we would see the revival of the petrol car but he believes it will be short lived.

"Ask anyone under 30 if they could buy an electric or petrol car (and they were the same price) most would want electric cars because they are 'cool'. They don't care about range anxiety or power caseload or even infrastructure.

"I disagree with views that there will be a slow take-up of electric cars I think there will be a rapid take-up of electric vehicles.

"Car manufacturers are ready they have electric models coming out of their ears. Their issue is that they have massive investments in factories that produce internal combustion engines, so they cannot afford to switch overnight. There will always be people who want electric cars, but I say passenger cars using fossil fuels are going to become a collector's item diesel much sooner than that."

It won't be the end of oil though, he stressed: "In 2017 total global oil consumption was a record 95m barrels a day; 2018 was estimated at 97m another record; and that growth is expected to continue until it peaks at 115m by 2030. Certain transport modes such as ships and planes consume vast amounts of oil. There are also 300k HGVs in the UK, but environmental pressure on road transport will be relentless, with fleets having to show tangible CO2 and air quality improvements. So expect significant increases in the use of HVO renewable diesel; GTL (gas-to-liquid, diesel made from gas); much higher biofuel blends (25-75%); diesel emission reducers (AdBlue). CNG (Compressed Natural Gas) and LNG (Liquefied Natural Gas) might be an alternative to diesel, particularly for commercial transport.

"Electric is coming and will replace fossil fuels in passenger cars in our lifetime and probably much, much sooner. But oil is going to take a long time to die. However good alternative energies seem on a small scale, they offer no silver bullet."

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Weekly retail fuel prices: 4 November 2019
RegionDieselLPGSuper ULUL
East130.9367.90138.13126.75
East Midlands130.73139.73126.64
London130.73139.60127.04
North East129.5562.90137.10125.31
North West129.9963.90138.40126.48
Northern Ireland128.05133.57124.33
Scotland130.6059.30137.24126.23
South East131.4566.90139.66127.42
South West130.7674.90137.94126.68
Wales129.84136.06125.42
West Midlands130.4059.90137.63126.57
Yorkshire & Humber130.02139.47126.29

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