UK refiners play down panic fuel buying ahead of price protests

London (Platts)--13Sep2005

UK refiners said Tuesday they had no shortage of road fuel supplies
despite a spate of panic buying ahead of three days of planned protests over
record pump prices.
     Shell, BP and Total, three of the UK's main refiners, said more of their
retail sites than usual were awaiting fuel deliveries due to a surge in demand
over the last few days. Shell said it had increased tanker deliveries to its
sites "day and night" to meet demand.
     A small group calling itself Fuel Lobby last week threatened to blockade
all UK refineries on Sep 14 unless fuel prices come down. Although the Fuel
Lobby reportedly later said it did not plan to disrupt supplies, the threats
have sparked concerns of a repeat of September 2000, when farmers and hauliers
brought the UK to a virtual standstill using blockade tactics over high pump
prices.
     During the protests five years ago, Brent crude on London's International
Petroleum Exchange peaked at $34.98/bbl. On Aug 30, the European benchmark had
almost doubled to $68.89/bbl, sending gasoline prices to more than GBP1/liter
($1.83) at some pumps.
     "There's plenty of fuel and diesel around," a BP spokeswoman said.
"Tankers deliveries are being made to sites day and night to make sure they
have enough fuel."
     Total said it was "working hard" to supply fuel to retail sites which
have been affected by "panic buying on the part of a minority."
     The UK's Petroleum Industry Association said it was in talks with police
and government official to ensure any disruption to fuel supplies was not felt
at the pumps.
     "The UK refining and marketing industry is aware of the speculation
regarding possible fuel protests and is closely monitoring the situation,"
Chris Hunt, Director General of UKPIA, said in a statement. "The public should
be reassured that the UK has ample refining capacity and crude oil supply to
satisfy internal demand and remain a net exporter of petrol."
     At the end of the protests in 2000, UK finance minister Gordon Brown put
planned fuel duty rises on ice and the treasury says duty on fuel has actually
fallen in real terms by 14%, or 7p a liter, since 2000.
     The government also drew up contingency plans together with police and
oil companies as part of a "fuel task force" set up to avoid a repeat of the
fuel crisis. The plans included training military drivers to help drive fuel
tankers to keep fuel flowing to the pumps.
     Fresh discontent over retail fuel prices has already surfaced in France
with riot police moving in to lift blockades of several fuel depots last week
after lorry drivers picketed sites in protest over high pump prices.
     Dissent over the impact of high oil prices has not only been voiced by
consumers. The economy ministers of both France and Austria have said they
were considering a windfall tax on oil companies if they fail to help bring
down pump prices.
     Earlier Tuesday, UK's Brown said while the government "understands" the
impact of high fuel prices on consumers, he urged OPEC to increase production
at its meeting next week because "demand is outstripping supply."
     "We understand the problems that are faced by hauliers, by farmers and
motorists, by ordinary consumers right across the country," Brown said. "The
first action we must take is to tackle the cause of this problem. Ensuring
concerted global action is taken to bring down world oil prices and
stabilize oil markets for the long term."

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