PRA chairman Brian Madderson has written to the Chancellor Richi Sunak urging him to introduce an emergency three-month credit line for fuel retailers and warning many will be forced to close without it.
He added that the news of major oil producers planning to cut their output will quickly impact UK wholesale costs, and independent forecourt operators will struggle with the surge in cost.”
Madderson outlined his case in an interview on Sky News. He said: “PRA members are extremely worried and their main concern is cash flow.”
He praised measures already introduced by the Chancellor but said none of his members wanted to furlough staff because they wanted to stay open, and for that they needed all of their staff coming in, probably on a 24-hour basis.
He also explained that the £25,000 grant available to businesses would not help. “A lot of people would be surprised to know that 70% of our income from fuel is actually government tax, so when a 38,000-litre tanker comes to fill up one of our sites, of that £26,000 is tax.
“The £25,000 grant he has offered to small- and medium-size businesses is terrific, but as far as we are concerned it merely goes back to the Government in the form of the tax that we have to pay in fuel duty and VAT.”
He said what was needed was for the Government to lengthen the current tax deferment for refiners and importers of fuel, from six months nine months, and this would allow the companies supplying PRA members to give them three months credit.
He added: “This makes it a much fairer playing field because supermarkets already get up to three months credit, the oil companies give themselves three month credit, but 70% of the forecourts across the UK, which are our members – small or middle-sized often family businesses – they have to pay by direct debit in one or two days.”
The PRA is in daily touch with the Department for Business, Energy and Industrial Strategy (BEIS) giving feedback from its members and Madderson their most immediate need was help with cash flow, otherwise they would have to shut up shop.
He explained that one of the problems was that with the collapsing price of petrol and massive drop in demand, many sites were being left with petrol bought at the previous high prices and if they cut their prices they would be selling at a loss.
He added: “This means some are saying let’s just lock up the site, keep the stock that we bought, and in three months time we will be able to sell it at a price we won’t lose money on.
“That’s not going to help the staff in the front line services who all need our sites right around the country to be open to them.”
Madderson said it was not just rural sites that were suffering. Six in West Country had closed, but so were a further five in London.
He said: “If the authorities are trying to get people away from crowded public transport on to the roads then filling stations need to be open, often for 24 hours a day, for nurses and doctors, right across the UK.”