The fuel industry says stocks at refineries remain high © Matthew Horwood/Getty Images
The fuel industry says stocks at refineries remain high © Matthew Horwood/Getty Images

'Curb non-essential driving to rebalance fuel supply chains'

Will Green is news editor of Supply Management
28 September 2021

The UK government should put in place measures to discourage non-essential driving to alleviate fuel shortages and allow supply chains to rebalance, according to academics.

Dr Florian Lucker, senior lecturer in supply chain management at Bayes Business School, said commodity products including fuel depended on a stable pattern of demand and supply.

“The fuel crisis highlights the risk of supply shortages for many commodity products, ranging from fuel to beverages or toys,” he said.

“These products are produced and delivered to customers using cost-efficient supply chains which are designed to deal with a stable pattern of demand and supply. When either of these is disrupted, as with current demand for petrol, product shortages are inevitable, and with price competition there is little room for manoeuvre.”

Lucker’s comments follow the UK government announcement that army tanker drivers have been put on standby to deliver fuel amid panic buying at petrol stations across the country.

Business secretary Kwasi Kwarteng described it as a “sensible, precautionary step” as filling stations ran out of fuel and fights broke out on forecourts.

He said the industry expected demand would “return to its normal levels in the coming days”.

“The UK continues to have strong supplies of fuel, however we are aware of supply chain issues at fuel station forecourts and are taking steps to ease these as a matter of priority,” Kwarteng said.

“If required, the deployment of military personnel will provide the supply chain with additional capacity as a temporary measure to help ease pressures caused by spikes in localised demand for fuel.”

Panic buying was triggered after the lorry driver shortage, which has already hit supermarkets and the food sector, was linked to some filling stations running out of fuel.

The fuel industry has issued a joint statement confirming supplies at refineries remain high and the public should purchase fuel as normal.

The driver shortage has been blamed on factors including an ageing workforce, unattractive working conditions, the pandemic, and Brexit.

Irn Bru maker AG Barr has become the latest company to report supply chain challenges due to the crisis, which has impacted customer deliveries and “inbound materials”.

To address the shortage the government has announced other measures including 5,000 temporary three-month visas for HGV drivers coming from the EU, which was criticised as a “putting a thimble of water on a bonfire”.

ManMohan Sodhi, professor of operations and supply chain management at Bayes Business School, said: “A better temporary solution would be to ask people to conserve fuel for a few days by putting measures in place that decrease non-essential driving.

“This would give oil companies time and leeway to sort out their inventories. This is indeed a case of less is more in terms of effectiveness.”

He added: “Shortages of goods and labour stemming from restarting the economy after lockdown in the face of pent-up demand will take time to resolve. The government must reduce uncertainties around Brexit and ensure the smooth flow of goods, but unfortunately this relies on EU partners having the same urgency.”

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