Britain’s dependency on foreign markets and its inability to meet the nation’s oil and road fuel needs is a “potential time bomb”.
A new report by business advisory firm Deloitte for the RAC Foundation suggests the UK’s 35 million drivers are “at the mercy” of international traders as ageing oil refineries are unable to meet the demand for diesel. The UK currently relies on the US and other European countries like the Netherlands, Sweden, Russia and Belgium for fuel imports.
The number of oil refineries in the country in the past decade has fallen from nine to seven and of those remaining, all but one has been up for sale within the past three years. The report suggests that as North Sea oil reserves decline, the UK will require significant investment for storage facilities.
Professor Stephen Glaister, Director of the RAC Foundation said: “The recent debates on security of supply have centred on our gas and food needs but our inability to meet our oil and road fuel requirements is a potential time bomb. We are becoming more dependent on international markets and foreign suppliers to keep the nation moving.
“Not only are our North Sea oil reserves being depleted, our ageing refineries are not configured to produce the quantity of diesel we use. Retrofitting these plants would cost many hundreds of millions of pounds; money the industry is unwilling to spend.”
He added the UK will have to compete with emerging nations like India and China for scarce resources: “Even if we can secure the fuel we need from abroad, unforeseen events – war, politics, weather – all threaten the stability of the supply chain and will have an impact on price. Diesels now account for half of all new car sales and just about 100% of lorries run on diesel. The consequences of a major disruption to supply would be enormous.”
According to figures from the DVLA, 8.7 million cars registered in Britain use diesel and 19.5 million use petrol.