The Government’s Department of Energy & Climate Change (DECC) has been slammed for publishing “dangerously misleading” comments on the security of UK fuel supplies.
Petrol Retailers’ Association (PRA) chairman Brian Madderson said: “The press release issued by DECC commenting on the Deloitte Report ‘Study of the UK Retail Fuels Market’ fails to highlight the serious structural issues in the market.”
Madderson continued “Such issues were noted in the report yet DECC offer the dangerously misleading conclusion by stating ‘in the event of a total disruption to petrol and diesel supplies the retail sector holds up to eight days of fuel capacity to meet current demand.’
“Government must not ignore the clear warnings featured in the report by focusing solely on unproven contingency measures for the fuels supply chain rather than on essential onsite petrol filling station (PFS) storage. An overhaul of the Emergency Plan for Fuels is now imperative.”
Madderson said he welcomed the Deloitte report, which was commissioned by DECC, because it “indisputably confirms that the majority of fuel forecourts are running with dangerously low levels of stock and that the continued closure of forecourts is reducing onsite storage capacity across the country.”
He said the study found that the 5,500 independent forecourts, which equates for 60% of the total, are being forced to cut back stock levels to control working capital costs.
Madderson said: “It is frustrating to find that Government imposes a penal tax regime of duty and VAT on these small, family owned businesses.
“Most businesses have to pay the tax within one to three days of a stock delivery before they have chance to collect the tax from their customers. Furthermore banks are reluctant to extend overdraft or loan facilities so their only option is to run their fuel storage close to empty.
“Why do the Government offer deferred duty arrangements to the big oil companies that are best placed to pay immediately, yet not to the small independently run forecourt?”
He added: “Independent forecourts only hold two to four days stock on site to meet normal demand levels. However it could be six to ten days if the Government moved the duty point from the terminal to the point-of-sale. After all, we are trusted to collect VAT at the pumps, why not duty too?”
Retail price movements are also covered by the report and it gives a clean bill of health to the industry stating that ‘there is evidence to suggest that reductions in the crude price are passed on faster than increases in price’.