UK ‘is facing a diesel drought’

Time 12:54 pm, September 16, 2015

THE UK is facing a diesel drought and finding itself ‘at the mercy of the global market’ because of growing demand for the fuel, the RAC Foundation warned today.

It said that diesel was selling twice as fast as petrol, and that this ‘mismatch’ was set to widen. The motoring research group forecast that by 2030 diesel could be selling four times as quickly.

This meant the UK was facing a growing reliance on imported supplies as production struggled to meet demand.

According to the foundation, demand for diesel has gone up by 76 per cent over the past 20 years, compared with a 46 per cent downturn for petrol. It is forecast that demand for diesel will continue to go up, with some estimates putting it at as much as 20 per cent by 2030, as petrol demand also falls. Diesel would then be outselling petrol by four litres to one.

The foundation said that in 2013 45 per cent of the UK’s diesel needs was already being met by foreign supplies, and it added that the closure of refineries here was partly to blame for the increasing dependence on imports.

In 2009, the UK had nine major refineries but now there are six, with several having been or currently up for sale. The imbalance has also been caused by some of the older refineries being changed to produce petrol as opposed to diesel.

A report by Nick Vandervell for the foundation says that the total of diesel cars has also shot up in recent years, from 1.6 million in 1994 to 11 million in 2014, with the number of HGVs also rising: from 421,000 in 1994 to 474,000 in 2014.

Steve Gooding, director of the RAC Foundation

Steve Gooding, director of the RAC Foundation

Steve Gooding, director of the RAC Foundation, said: ‘Ministers have just announced plans to curb air pollution with potentially significant implications for the millions of households who run a diesel vehicle. As this report illustrates, diesel-engined cars, van and lorries are deeply engrained in our society. The report also highlights another concern – the security of supply of diesel fuel.

‘Today, every other car bought is a diesel, but our refineries have struggled to keep pace with demand and have not attracted the investment they need to switch over from petrol production.

‘Most of our refineries – some of which are more than half a century old – were built when diesel was a niche product. Retrofitting them is a billion-pound decision that has failed to stack up for investors who see refining as a low-margin business despite our sky-high pump prices. The result is that since 2009 three UK refineries have closed and others have been up for sale.’

Gooding added: ‘That leaves us at the mercy of the global market and much of the rest of Europe is in the same boat. We are having to look further and further afield for the fuel we need.

‘Recently, motorists have benefited from falling forecourt prices. We should be concerned about the potential for things to go the other way.’

The report can be read and downloaded here.

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