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PRA warns filling stations may be forced to close as sales dry up

John Wood ·
PRA chairman Brian Madderson
PRA chairman Brian Madderson
  (Photo:  )

Petrol filling stations could be forced to close because the financial pressures caused by coronavirus will render them unviable, the PRA has warned.

The warning came as figures released by the Department for Business, Energy & Industrial Strategy (BEIS) showed a massive fall in retail fuel sales.

A survey covering nearly 60% of all petrol filling stations (PFS) across the UK, including supermarkets, oil company and independent sites showed petrol consumption was down by 75% and diesel by 71% compared with the daily average prior to the coronavirus outbreak.

Brian Madderson, chairman of the PRA, said: “To help freight move and help key workers travel safely and independently through this period of crisis, petrol filling stations must remain open, but this is proving to be a challenge for many filling stations.”

He warned that many petrol stations will have to close in the coming weeks, as sales of fuel dry up and their businesses become unviable. Such sites would probably have to furlough staff and need to maximise their use of government aid available.

The BEIS survey also confirmed that more than 60% of PFS had full storage tanks of both grades. This fuel would have been bought by independent stations days or weeks earlier at much higher wholesale prices than obtain today with Brent Crude prices collapsing to an 18-year low of just US$20 per barrel.

Madderson added: “The situation will particularly impact PFS in rural areas where fuel volumes are right down. We will aim to keep a strategic network of petrol stations open across the country, but people should check their petrol station is open before they go to fill up.”

He said additional challenges faced by fuel retailers include:

• Staff shortages as employees self-isolate and/or tend to vulnerable members of their family

• Unrelenting fuel price competition from supermarkets enabled by burgeoning grocery demand

• Lack of flexibility on delivery loads and credit terms by some fuel suppliers

The PRA is recommending that the Government should instruct fuel suppliers to give the same 60-day credit terms to independent filling stations as they give to the supermarkets.

Madderson continued: “Fuel retailers are having to maintain pump prices at previous levels to avoid suffering significant stock losses. When the COVID-19 restrictions are lifted and high sales volumes return, then we expect to see reductions in retail fuel prices.

“Petrol stations are the Government’s tax collectors, with duty and VAT representing 70% of the pump price. It is in their interests that we remain open for business.”

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Weekly retail fuel prices: 1 June 2020
RegionDieselLPGSuper ULUL
East Midlands112.14121.84107.50
North East110.9563.90125.31105.73
North West111.56121.79106.78
Northern Ireland108.93114.90103.65
South East113.3559.90123.22108.19
South West112.0958.90123.24106.99
West Midlands112.32122.47107.23
Yorkshire & Humber111.71121.15106.44

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