Rural fuel stations could close as sales dry up due to COVID-19 travel measures

The Petrol Retailers Association has warned that many petrol stations will have to close in the coming weeks, as sales of fuel dry up and their businesses become unviable.

This weekend’s Department for Business, Energy & Industrial Strategy (BEIS) survey covering nearly 60% of all petrol filling stations (PFS) across the UK including supermarkets, oil company and independent sites showed much lower levels of fuel demand. Petrol consumption was down by 75% and diesel by 71% which indicates that the Government’s “stay at home” instructions to combat the coronavirus pandemic are being heeded.

The BEIS survey also confirmed that over 60% of PFS had full storage tanks of both grades. This fuel would have been bought by independent stations days or weeks earlier at much higher wholesale prices than can be obtained today with Brent Crude prices collapsing to an 18 year low of just US$20/barrel.

The situation is likely to particularly impact fuel stations in rural areas where fuel volumes are right down. The Petrol Retailers Association (PRA) are aiming to keep a strategic network of petrol stations open across the country, but people should check their petrol station is open before they go to fill up.

Additional challenges faced by fuel retailers include:

  • Staff shortages as employees self-isolate and/or tend to vulnerable members of their family

  • Unrelenting fuel price competition from supermarkets enabled by burgeoning grocery demand

  • Lack of flexibility on delivery loads and credit terms by some fuel suppliers.

The PRA is recommending that the Government must instruct fuel suppliers to give the same 60-day credit terms to independent filling stations as they give to the supermarkets.

Brian Madderson, Chairman of the Petrol Retailers Association (PRA), said: “To help freight move and help key workers travel safely and independently through this period of crisis, petrol filling stations must remain open, but this is proving to be a challenge for many filling stations.”

Madderson added: “Fuel retailers are having to maintain pump prices at previous levels to avoid suffering significant stock losses.  When the COVID-19 restrictions are lifted and high sales volumes return, then we expect to see reductions in retail fuel prices.

“Petrol stations are the Government’s tax collectors, with duty and VAT representing 70 per cent of the pump price. It is in their interests that we remain open for business.”

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