What’s going on?
Oil distributors in many parts of the country are experiencing difficulties making deliveries of heating and gas oil due to the weather and the abnormally high number of orders they are receiving.
The recent conditions have reduced deliveries by 60-70% in the worst-affected areas. Coupled with that, order levels are said to be between two and three times the seasonal norm.
Under normal winter weather conditions, deliveries are made in up to five days. However, current backlogs stand at around ten days in England and Wales and up to 20 in some parts of Scotland.
The Federation of Petroleum Suppliers which represents the oil distribution industry in the UK and Ireland has said that it is the weather, rather than a lack of product in the UK, which is affecting the numbers of deliveries being made.
How can I get fuel?
The fuel industry has issued a Code of Practice in conjunction with the Department for Energy and Climate Change in order to try to prioritise deliveries on the basis of need. Customers will be asked the following:
- How many days' supply you have left/how much oil remains in your tank – don’t rely on sight gauges, always dip your tank
- If you have already placed an order with another company
- If there are any difficulties with access to the farm or tank that could delay a delivery
If there is a risk to human health (e.g. vulnerable people in the household), or to animal health due to stock not being fed, you should make sure you communicate this to your supplier.
The FPS is appealing for customers to be honest about their circumstances. A number of people have claimed to have run out of oil or to have vulnerable people in their households simply in order to get a priority delivery. This makes the situation worse for customers who have genuinely run out.
But I’m nearly out of fuel, what else can I do?
If you are in danger of running out and will not be able to get a delivery, but you are in a position to collect fuel or heating oil yourself from your local depot to tide you over, we would encourage you to talk to your supplier urgently. Many distributors are making fuel and oil available in containers for collection.
If your regular supplier does not have this facility, check others in your area by looking on the Find My Distributor page of the FPS website, here.
What’s happening to the price?
Reported prices for fuel have spiked by over 44% for tractor diesel and by more than 50% for heating oil.
The FPS has explained that the UK does not produce sufficient gas and heating oil from its refineries and so it has to be purchased as a finished product on the international market where, due to supply and demand, its price is not necessarily directly related to that of crude, which has recently increased but not by nearly as much.
According to the FPS, the price of kerosene to the distributor changes daily. In a rising market, when quoting for delivery some time in advance, the distributors factor this in to the price as they do not know what they will be paying for the fuel by the time of the delivery.
The distribution problems caused by the cold weather since the start of the month have caused problems for distributors in obtaining kerosene, which have not only been restricted to the areas affected by snow.
For example, some of the oil terminals are rail-fed and there has been disruption of rail supply from the east coast refineries. That's meant that distributors have had to go further afield to collect product, putting strain on terminals and leading to queues to fill tankers in other areas that would otherwise have had sufficient supply. This is making collection more expensive.
In areas where the weather and road conditions have been bad it takes longer to make deliveries. Due to the number of people that have run out of fuel, tankers are having to be routed to supply them rather than using the most efficient routing. This, again, means drivers are less productive than normal and delivering fuel costs more.
Distributors recoup these higher costs through the price of the fuel and the FPS insist that the fuel distribution industry remains a highly competitive market and that consumers get a really good deal in normal circumstances. Charles Hendry, the DECC Minister confirmed in the House of Commons last week that he had spoken to the Office of Fair Trading about the price of heating oil and had received assurances that it is keeping a very close eye on the situation and is keen to receive evidence about any market abuse that consumers experience.
How long is this going to last?
If the cold weather eases after Christmas and supplies of oil continue to flow, distributors estimate that they will be back to normal delivery patterns from early to late January, depending upon the area of the country and their mix of commercial/domestic customers.
There have already been a succession of relaxations of the regulations governing the number of hours the fuel delivery drivers can work to help clear backlogs more quickly.
No comments have been made.