The PRA has called on the government to support the duty deferment scheme which would facilitate a significant boost to petrol retailers’ cashflow, thereby strengthening forecourt businesses, and ultimately improving the UK’s fuel supply resilience.

Chairman Brian Madderson explained that a tanker load of petrol today costs the independent retailer more than £50,000, with Government tax (duty + vat) being £30,000 and payable to the supplier virtually on delivery. There are no small or medium enterprises that have to pay so much tax before collecting the income from their customers.

“With such burdensome cash-flow constraints, it is essential that Government enables retailers to utilise the existing EPSS (Excise Payment and Security Scheme) for duty deferment relating to fuel supply,” said Madderson.

EPSS was introduced by the Chancellor in February 2007 for alcohols, oils and tobaccos with the intention of freeing up capital for investment, thereby assisting Small & Medium Enterprises (SMEs). Today, HMRE allows an average of four weeks deferment of duty payment, but this is currently retained by the oil companies and importers that supply fuel to the petrol forecourts and is not reflected in the payment terms offered to independent owners. The PRA is now helping its members to gain duty deferment terms under this existing scheme.

“Regularising EPSS for forecourts would incentivise these hard-pressed retail businesses to hold higher fuel stocks and release funds/assets currently held as fuel payment security for investment purposes,” explained Madderson.

“We are alerting Government to this ‘silver bullet’ that will both stimulate investment to provide more jobs and better facilities for motorists, especially in rural areas. We need the Government’s full support, and support from the oil companies to make this happen quickly and effectively,” stressed Madderson.

“With 6,000 fewer forecourts than at the time of the September 2000 fuel crisis, and all independents working to minimum stock levels, the UK’s ability to weather supply disruptions has become dangerously eroded.

“Memories of the fuel stock-outs at petrol stations as recently as March 2012 remain vivid and analysts suggest that recent events at Grangemouth may just be the foretaste for dramatic industry changes ahead.”

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