Financial News

Britain Could Run Out of Fuel by Weekend

10 06 2008

Britain could start running out of fuel this weekend. The threat of a four-day strike by tanker drivers has caused ministers to activate emergency procedures with the oil industry.

John Hutton, business secretary, has ordered officials to draw up contingency plans because of fears the strike could prompt much more widespread fuel shortages than those caused by the strike at Grangemouth oil refinery in April. Industry executives believe these fears are well founded, and said they were working with the government to implement measures to minimise disruption.

The emergency measures were discreetly activated last Friday so as to reduce the risk of panic buying, and would safeguard fuel for emergency services and provide for supplies to be moved around the country to areas of shortages.

After their claim for a 13 percent pay rise was rejected, around 500 drivers employed by Hoyer UK and Suckling Transport is threatening to strike for four days from Friday.

The two companies are sole suppliers to almost 1,000 Shell forecourts, which are concentrated in the south-east, the north-west, central Scotland and parts of the midlands.

Mr Hutton fears that striking drivers could picket distribution depots used by other companies, leading to wider disruption.

“It is difficult to gauge what the impact of the strike would be if it went ahead,” the Department for Business said. “Shell accounts for about one in 10 filling stations and it is inevitable there would be some stock-outs.

“If the strike were to affect other retailers, it would have a more significant impact. The government is working with the wider fuel industry on what could be done to reduce any disruption to the public and business.”

Shell said on Monday night: “We are doing everything we can to avoid and minimise the impact of Unite’s industrial action.”

Mr Hutton is hoping that union and employers can resolve their differences at Acas, the conciliation and advisory service, when they meet for talks later this week. He says he accepts the need to strike a balance between preparing for fuel shortages and causing public panic.

The emergency measures include a suspension of anti-cartel rules to allow oil companies to exchange information about stocks.

The current driver salary sits at around £36,000 with the haulage companies offering to raise it by 6.5 percent. Hoyer says it is “disappointed” by the reaction of Unite, the drivers’ union. It says it has increased pay by 27 percent in the past four years.

The union, however, blames Shell for putting pressure on hauliers to keep wages down. It says the average salary of £36,000 includes a lot of overtime.

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