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September 27, 2021
The government is to suspend competition law to allow oil firms to target fuel deliveries at petrol stations following recent panic buying. Officials said the move would make it easier for companies to share information and prioritise parts of the country most in need.
It follows days of long queues at the pumps after fears of disruption to the fuel supply sparked panic buying. Ministers are also considering deploying the Army to deliver fuel.
The Petrol Retailers Association has warned that as many as two-thirds of its membership of nearly 5,500 independent outlets are out of fuel, with the rest of the "partly dry and running out soon". The UK has a total of more than 8,000 filling stations. Announcing the measure to exempt the oil industry from the Competition Act 1998, Business Secretary Kwasi Kwarteng said the government had "long-standing" contingency plans to maintain fuel supplies.
"While there has always been and continues to be plenty of fuel at refineries and terminals, we are aware that there have been some issues with supply chains. "This is why we will enact the Downstream Oil Protocol to ensure the industry can share vital information and work together more effectively to ensure disruption is minimised. "We thank HGV drivers and all forecourt staff for their tireless work during this period."
The government also relaxed the competition law in March 2020, to help supermarkets work together to maintain food supplies. A shortage of lorry drivers has caused problems for a range of industries in recent months, from supermarkets to fast-food chains. In recent days, some fuel deliveries were affected, leading to panic buying and lengthy queues at some petrol stations.
In a joint statement from companies including Shell, ExxonMobil, and Greenergy, the industry reiterated that pressures on supply were being caused by "temporary spikes in customer demand - not a national shortage of fuel".
PRA chairman Brian Madderson said the shortages were down to "panic buying, pure and simple", with oil companies prioritising keeping motorway service station pumps topped up. Pumps were mainly running dry in Britain's urban areas, while Northern Ireland was currently unaffected, he said.
Mr. Madderson also said that filling stations were being restocked, but there were not enough deliveries to restore their normal levels of fuel. "One of our members yesterday received a tanker at midday and by late afternoon the entire tanker had disappeared into people's cars," he said.
On Saturday, the government announced it would offer temporary visas, lasting until Christmas Eve, to 5,000 foreign fuel tanker and food lorry drivers and 5,500 poultry workers in a bid to limit disruption in the build-up to Christmas.
Other measures include sending nearly one million letters to drivers who hold an HGV license - to encourage them back into the industry - and plans to train 4,000 people to become HGV drivers.
Elizabeth de Jong, director of policy for Logistics UK, told Today that it would be "days, possibly a couple of weeks" before the visa applications were open. She said the industry had wanted more visas to be available and for a longer time, but she said the key issue now was to make them attractive to drivers, which was likely to mean offering good wages.
The UK had lost 72,000 drivers between the second quarter of 2019 and the same period in 2021, Ms de Jong said - partly due to people returning to the EU after Brexit. At the same time, she said the pandemic had disrupted testing for HGV licenses, making it harder to replace the lost drivers. The shortage of drivers and other workers is also causing concern in the food and retail industry.
The British Retail Consortium said the number of visas being offered was "too small" to make an impact on the disruption expected at Christmas.
What is competition law?
Competition benefits consumers. It encourages firms to innovate and improve their offer to draw customers in. It can mean products are better, often at lower prices. It also aims to make sure firms compete on a level playing field, as well as protecting them from other businesses acting unfairly.
It stops businesses from making agreements with each other that would distort competition, leaving customers worse off. Agreeing to fix prices for certain goods or services, limiting production to drive prices up, or carving up markets, for example, could all end up breaking competition law. That risks serious fines, people being banned from running companies or even jail.
During the pandemic, the government has intervened to exempt certain industries from elements of competition law. At the height of the coronavirus crisis, for example, supermarkets were allowed to share more information with each other on stock levels and share depots and delivery vans, to meet customer demand.
The latest move will allow fuel suppliers to share information on which locations are most in need and, according to the Petrol Retailers Association, possibly put fuel into their competitors' sites - which they would not typically be allowed to do.
Andrew Opie, director of food and sustainability policy at the trade association, said: "I think we're going to see less choice, less availability, possibly a shorter shelf life as well, which is really disappointing because this could have been averted."
Shortage of Poultry products
Meanwhile, turkey farmer Kate Martin warned supermarkets could run out of poultry before Christmas. She said there were fewer turkeys being produced because the big processors "know they will not get them processed".But the boss of supermarket chain Aldi in the UK said he expected "business as usual" at Christmas. Recruitment for additional short-term HGV drivers and poultry workers will begin in October, with the visas valid until Christmas Eve.
MSBM - UK
The Professional Certificate in Supply Chain System Models aims to introduce the learner to the different models used for the successful management of an organization’s supply chain.
3 hours per week
MSBM - UK
The Professional Certificate in Supply Chain Management aims to equip the learner with the fundamental concept and techniques of supply chain management.
3 hours per week