Petrol stations in rural places struggling to remain open

The Petrol Retailers Association (PRA) 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.

A recent Department for Business, Energy & Industrial Strategy (BEIS) survey which covered nearly 60 per cent of all PFS across the UK - including supermarkets, oil company and independent sites - showed much lower levels of fuel demand.

Petrol consumption was down by 75 per cent and diesel by 71 per cent, indicating that the Government’s “stay at home” instructions to combat the coronavirus pandemic are being heeded.

The BEIS survey also confirmed that over 60 per cent of PFS had full storage tanks of both grades on site. This fuel would have been purchased 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 $20 a barrel, illustrating the economic impact of the pandemic.

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

“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.”

The lockdown situation is having a particularly strong impact on PFS in rural areas, where fuel volumes are significantly down. The PRA is aiming to keep a strategic network of petrol stations open across the country, but it is advising people to check that their local petrol station is open before they go out to fill up their car.

Smaller, independently run petrol stations are facing additional challenges, such as staff shortages as employees self-isolate or stay at home to tend to vulnerable members of their family. A lack of flexibility on fuel delivery loads and credit terms imposed by some fuel suppliers is also a concern.

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 major supermarkets.

E&T recently analysed the reasons why the number of petrol stations is falling in the UK. From a peak of around 40,000 sites in the 1950s, now there are just 8,400.