U.K. Government Says Fuel Supplies Secure in No-Deal Brexit

(Bloomberg) -- The U.K.’s supply of oil and refined fuels will not be put at risk if the country crashes out of the European Union without a deal, the government said.

“The U.K. can draw on both substantial domestic production and oil imports from diverse international sources, including Europe, meaning that supply is secure,” the government wrote in a report published on Tuesday.

The U.K. is stepping up preparations for a no-deal Brexit at the end of this month as the chances of reaching an agreement with the EU look increasingly unlikely.

The government says it’s been working with the energy sector on contingency planning and “will continue to work closely with industry to ensure it develops appropriate plans for risks.”

One of those plans is a contingency program, which the government says is designed “to improve the distribution of fuels” during any disruption “before and/or instead of the use of emergency powers.” It includes making 80 road vehicles available for the distribution of crude and refined fuels.

When asked about concerns over fuel shortages, the Road Haulage Association Ltd’s director of policy and public affairs Rod McKenzie said, “our members are worried about everything.”

McKenzie added U.K. business isn’t prepared for Brexit on October 31. “Whether it’s about fuel supplies, or food deliveries, we’re not ready.”

Oil industry trade groups and analysts were less concerned about disruption to fuel supplies.

“While pinch points have been identified, much of the fuel import infrastructure is dedicated and mitigation plans for the event of a ‘No-Deal’ Brexit have been made,” a U.K. Petroleum Industry Association spokesman said in a statement. “The lack of certainty of what day one looks like will mean the risk cannot be completely mitigated but as responsible operators, our members have been preparing for all eventualities to the best of their abilities.”

Steve Sawyer, an analyst at consultant Facts Global Energy, also said he doubts that a no-deal Brexit would risk fuel supply.

“The only issue will be if extra checks and admin required slow up imports,” Sawyer said in response to emailed questions. “But then that’s what you have stocks for: to smooth out such disruptions until it all gets sorted out.”

In the report, the government said “most border and import processes will remain the same” because fuel is mainly imported through terminals. It also added that in the event of a no-deal Brexit, the U.K. will no longer be bound by EU oil stockholding obligations but as a remaining member of the International Energy Agency, it will continue to fulfill the IEA’s obligations nonetheless.

To contact the reporter on this story: Olivia Konotey-Ahulu in London at okonoteyahul@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Helen Robertson, James Herron

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