Britain Faces 'Diesel Drought' as Reliance on Imports Grows

Britain is facing a diesel drought that could drive up prices at the pump and leave the country more vulnerable to supply shocks, a transport policy group has warned.

 

The RAC Foundation, a research and policy group, said the rapid demand growth for diesel in Britain and the closure of some of its refineries had created a precarious situation.

 

"We are having to look further and further afield for the fuel we need," said Steve Gooding, director of the foundation, adding Britain was "at the mercy of the global market".

 

Refineries across Europe are largely designed to produce gasoline, rather than diesel, despite disproportionate demand growth for the latter fuel driven in part by government policies targeting lower emissions.

 

The RAC said diesel demand had risen 76 percent over the past 20 years, compared with a 46 percent decrease for petrol.

 

This mismatch has for years put pressure on European refineries' profitability. Capacity of more than 2 million barrels per day (bpd) has closed since 2009, including the Coryton, Teesside and Milford Haven refineries in the UK.

 

These changes tripled Britain's net imports of petroleum products last year.

 

While there have been rapid increases in diesel production elsewhere in the world, including the Middle East, India and the United States, the foundation warned that the closure of another UK refinery could "pose very serious risks to security of supply ... unless there is investment in additional storage capacity and import infrastructure."

 

It called on the government to craft policies that could help the domestic refining industry compete globally, and to closely monitor the resilience of the country's fuel supply chain.

 

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