U.K. Fuel Panic Deepens the Pain in Crisis-Prone Economy
(Bloomberg) -- For Sof and Kridos Arnaoutis, the U.K.’s fuel crisis quickly evolved from an inconvenience that disrupted their weekend plans into a serious financial risk for their business.
It started out with inflated taxi fares for a night out in London’s bar-and-club district of Soho, said Kridos Arnaoutis, who with his brother runs a plumbing supplies company. A few hours later, it turned into a long struggle to find enough fuel to get his drunk friends back to their homes.
By Monday morning, the shortages of gasoline and diesel were having a more sobering effect with wider repercussions for the U.K.’s economy.
“My delivery van is running on fumes,” said Sof Arnaoutis, the owner of Excel Plumbing and Heating Supplies in north London. “One of my guys is out looking for fuel right now.”
His firm had already been struggling to get supplies from overseas because of a driver shortage and the fuel crisis is making that problem even worse.
“I’ve had two delivery guys bringing spare plumbing parts already cancel on me this morning,” said Arnaoutis. “I’ve probably got to cancel some upcoming deliveries this week, so I’ll be in trouble financially.”
Major U.K. industries from food processing to utilities were already reeling from the effects of Brexit, a supply-chain crisis and record surge in energy prices. The sudden disruption to road-fuel supplies threatens to spread that pain even deeper into the economy, leaving small businesses, care workers and taxi drivers unable to do their jobs.
What started last week as a limited problem affecting one company quickly snowballed into a national crisis.
On Thursday, BP Plc said it had been forced to shut down a handful of its 1,200 U.K. fuel stations and restrict supplies to others because it didn’t have enough drivers for its delivery trucks. Government ministers toured TV studios to say there was no fuel shortage and the closure had only affected five sites, but their reassurances had little effect as lines began to grow at pumps around the country.
By the weekend, the surge in buying was starting to empty fuel stations. Long lines of vehicles desperate to fill their tanks before supplies ran out were blocking busy London roads and the police were intervening to control traffic or stop fights at the pumps.
The U.K. government, facing criticism that it had sat back and let the supply-chain crisis worsen for months, announced some emergency measures and is considering bringing in army drivers to get fuel flowing again, but business groups say the crisis is unlikely to be solved quickly.
There was no sign of improvement as the working week got underway on Monday, with fuel stations shut down at every point of the compass in London. From Balham Hill in the south to the Holloway Road in the north, service stations had covered their pumps and put out signs saying fuel was unavailable. Still, cars and vans continued to drive through vainly seeking supplies.
At a station in Southfields, southwest London, police were called to break up a dispute that erupted when a person on a motor scooter tried to jump ahead in a line of more than 40 motorists, some of whom said they’d been waiting over an hour.
Companies that sell gasoline and diesel are struggling to provide clear time-lines on when the situation will normalize. In the meantime, people who rely on motor vehicles to get to their jobs or run their businesses face growing uncertainty.
“I’ve been in business 30 years and this has only happened to me once before, in the mid-90s,” said Julian Stone, owner of the American Dry Cleaning Company, which has 45 stores around London and the south-east of England.
Just six out of 15 vans had enough petrol to operate on Monday, he said. The company has had to limit service because it can’t promise to return customers their clothes as soon as they want.
In a city that’s been transformed by the stay-at-home mandates of the Covid-19 pandemic, it’s not just the delivery of goods that’s become a vital part of economic activity. Many services are now delivered to people’s doors by entrepreneurs who rely on their vehicles.
“I’m a mobile personal trainer, I tend to go to my clients’ houses,” said Adam Knowles, who lives and works near Earlsfield in southwest London. His vehicle is essential for carrying equipment such as dumbbells or kettle-bells, but as of Monday morning he had no fuel. “If I don’t deliver those PT sessions, I don’t make any money,” he said.
For London Mayor Sadiq Khan, the priority was securing supplies of fuel for the people that keep the city ticking over -- hospital workers, in-home carers, taxi drivers.
“We’ve got to get the army in as soon as possible,” Khan said in an interview with Times Radio. The mayor’s office is working with the Department of Transport to try to “make sure some petrol stations were reserved for those key workers that needed it.”
Groups from the Unite labor union to the British Medical Association echoed that call, but for now the government won’t take further steps until it can see whether a suspension of competition rules -- allowing companies to coordinate fuel supplies to the most affected regions -- will have any effect, according to a person familiar with the matter.
That leaves the situation on the ground “getting worse, not better,” said Steve McNamara, General Secretary of the Licensed Taxi Drivers Association.
Increasingly many of the group’s members are traveling to motorways, where fuel stations generally still have supplies, McNamara said. That’s “a round trip of 40 miles, 50 miles, which on a cab that does 250 to 300 miles on a tank of petrol is a bit extortionate. But what do we do?”
After half a decade lurching between one political and economic drama and another -- from Brexit to the coronavirus pandemic to a global supply chain crisis -- the toll on the country is increasingly evident.
At Cricks Corner coffee shop in London’s Archway district, manager Henry Coombes demonstrated the breadth of disruptions suffered by U.K. businesses, and the resilience required to keep going.
“We couldn’t get any cups delivered for days when that ship blocked the Suez Canal,” said Coombes. “But we’re fine for now. All our bread is delivered by bike.”
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