Graeme Wearden 

PM says UK fuel situation improving but urges motorists to go about business in ‘normal way’ – as it happened

Rolling coverage of the latest economic and financial news, as the UK’s supply chain crisis continues
  
  

Drivers queue for fuel at a petrol station in London.
Drivers queue for fuel at a petrol station in London. Photograph: Frank Augstein/AP

Full story: Supply chain crisis could last months admits PM but fuel situation ‘improving’

Britain’s supply chain strain could last until after Christmas, Boris Johnson has admitted as he urged motorists to stop panic-buying fuel by insisting supplies were “improving” – despite thousands of forecourts remaining dry.

The prime minister intervened after being accused by Labour of “reducing the country to chaos” with car queues continuing to build up and fights breaking out at petrol stations, while teachers and hospital workers were left unable to get to work.

Seeking to reassure people there was no shortage of fuel at refineries, Johnson said he knew the difficulties had been “infuriating” but stressed that everyone should “go about their business in the normal way”.

“We now are starting to see the situation improve, we’re hearing from industry that supplies are coming back on to the forecourts,” he said.

Nevertheless, Johnson admitted the government was concerned about potential shortages of other goods leading up to 2022, saying:

“What we want to do is make sure that we have all the preparations necessary to get through until Christmas and beyond – not just in the supply of the petrol stations, but all parts of our supply chain.

“You’re seeing the global economy really sucking in a huge amount at the moment, for gas, for lorry drivers. There are shortages around the world … but we’ve got to make sure we have everything in place as the recovery continues, and that’s what we’re doing.”

His comments came as the Petrol Retailers Association announced there were “early signs” that the crisis at pumps was ending. The organisation, which represents around 5,500 independent forecourts across the UK and at the end of last week said 50%-90% of its members had reported running dry, said that figure had fallen to 37% on Tuesday.

Despite the government’s bullishness, some senior insiders are still tentative. One said it was “still too early to call” whether the situation would continue improving, while others were reluctant to say that the crisis was near ending.

There is uncertainty about exactly which goods will be disrupted by the shortage of about 90,000 heavy goods vehicle (HGV) drivers – with sources predicting that shop and supermarkets shelves will not run bare, but that the number of different brand products available to customers will be squeezed.

Here’s the full story by our political corrrespondent Aubrey Allegretti....

That’s all for today. Goodnight. GW

Evening summary

Time for a quick recap.

The UK’s fuel crisis may be finally easing after several days of widespread disruption that has left motorists struggling to find petrol, and led calls for key workers to be prioritised at the pumps.

Prime minister Boris Johnson said this evening that the situation is improving, but also called for motorists to buy fuel as normal.

We now are starting to see the situation improve. We’re hearing from industry that supplies are coming back onto the forecourts in the normal way.

Johnson also says the surge in demand was “totally understandable”, given reports of shortages at the pumps that sparked panic buying.

But there are also signs that the wider supply crisis could drag on for months, with the PM talking about getting through Christmas, and beyond....

“What we want to do is make sure that we have all the preparations necessary to get through until Christmas and beyond, not just in supplying the petrol stations but all parts of our supply chain.”

He was speaking after the fuel industry indicated that more supplies are getting through to forecourts, in an early sign that the crisis is easing.

Johnson also claimed that the UK’s supply chain problems were due to the global economy’s recovery from the pandemic, which has driven up demand for energy and skilled workers.

Critics of the PM’s Brexit deal, though, say that ending free movement with Europe compounded the problems.

Opposition politicians blamed the government’s handling of the crisis, with Labour saying ministers were wrong to blame the public, and the Liberal Democrats criticising a lack of planning.

And Keir Starmer has tonight called for key workers to get priority at the pumps, after a series of warnings that doctors, nurses and other medical staff could struggle to reach patients.

Johnson, though, says the best plan is to stabilise the situation by behaving normally.

But in a illustration that the crisis isn’t over, the Ministry of Defence has approved a request for army drivers to drive fuel trucks, if needed.

The Petrol Retailers Association has reported early signs that the crisis at pumps is ending, with more of its members taking further deliveries of fuel.

Gordon Balmer, the PRA Executive Director, says:

“Fuel stocks remain normal at refineries and terminals, although deliveries have been reduced due to the shortage of HGV drivers.

“We have conducted a survey of our members this morning and only 37% of forecourts have reported being out of fuel today. With regular restocks taking place, this percentage is likely to improve further over the next 24 hours.”

Transport secretary Grant Shapps also said petrol storage levels were stabilising, although this won’t be apparent in the level of queues at petrol stations.

“We’re starting to see very tentative signs of stabilisation which won’t yet be reflected in the queues,

Shapps also urged people not to take containers to forecourts to stockpile petrol.

In particular, no more water bottles at petrol stations: it’s dangerous and not helpful.

Economists warned that the crisis would hit economic growth if it drags on beyond this week, adding to the burden on consumers.

In a very worrying development tonight, charities warned that some cancer patients’ appointments are being cancelled.

Dr David Wrigley, the deputy chair of the British Medical Association, said essential services could be hit if staff were unable to get to work because they could not fill up.

He told Times Radio.

“We can’t be waiting two or three hours in a queue for fuel when we have patients to see. It’s a critical situation where we’re unsure we’ll have the fuel to do NHS and social care work, so a plan does need to be in place.”

Care workers also called for help getting fuel.

Teaching unions called for teachers to be prioritised, to avoid more disruption to pupils’ learning on top of the pandemic.

And the day began with fresh reports of queues at petrol stations with fuel on offer, and closures elsewhere, after several days of heavy buying by worried motorists, or those going about their daily lives.

Wholesale gas prices have reached new all-time highs, stoking concern that a cold winter could deepen a crisis that has led to the collapse of multiple energy suppliers and raised fears of factory shutdowns and soaring bills.

The cost of coal and carbon emissions permits also hit record levels on Tuesday, while crude oil exceeded $80 a barrel for the first time in three years, amid a widening global energy supply crisis.

Gas for delivery in winter to British buyers jumped by more than 20% to 218.4p a therm during late morning trading. European gas prices rose by 10%, with price pressure exacerbated by a dwindling supply from Russia.

Supply dropped on Tuesday as the flow of Russian gas via the Yamal-Europe pipeline fell by more than half, the Interfax news agency reported, citing data from the grid operator Gascade.

The situation in the UK, where market prices have quadrupled in the past year, is particularly acute.

Here’s the full story:

And here’s more details of the energy squeeze hitting many countries

Fuel crisis leading to cancellations of NHS cancer appointments

The postponement of NHS appointments for some cancer patients because of the fuel crisis will heap additional pressure on patients and their families, charities have warned.

The Guardian learned that several cancer patients due to attend appointments this week at University College hospital (UCLH), one of London’s largest hospitals, have been told they will have to be rescheduled.

A UCLH spokesperson confirmed a “small number” of patients were having appointments rearranged, but said no patients requiring urgent treatment would have their treatment delayed.

The spokesperson said:

“Owing to the national fuel supply we are rearranging a small number of outpatient appointments over the next few days for patients who are due to be brought into our hospitals by our non-emergency patient transport provider, offering virtual appointments where possible.”

Samantha Dixon, the chief executive of Jo’s Cervical Cancer Trust, said:

“This is really concerning and heaps additional stress on cancer patients and their families at an already difficult time, in addition to NHS staff across the country.

“The current backlog in cancer services due to Covid is already high and we cannot afford to add additional delays. A solution is urgently needed so that patients do not have to deal with the prospect of postponed tests and treatments. In an already difficult year, this is the last thing they need.

Here’s the full story, by my colleagues Andrew Gregory and Sarah Marsh:

One late development. The Ministry of Defence has approved a request for army drivers to offer assistance in the fuel crisis if required.

PA Media say:

Defence Secretary Ben Wallace has signed off the request for military assistance, with up to 300 troops able to be deployed if required.

Sources said 150 drivers and 150 drivers’ mates could be made available under Operation Escalin.

Government sources confirmed the military assistance to the civil authorities (Maca) request had been approved.

Yesterday, the government ordered the army to remain on standby, ready to help fuel reach petrol stations hit by panic buying.

With the government, and industry, are saying the situation is stabilising tonight, I think this latest move means troops will be ready to help drive fuel around the country if needed.

PA explains:

A Government source said the troops were “still on standby but can now start training now it’s approved”.

They could be deployed in the coming days if required.

Sky’s security and defence editor Deborah Haynes says more details should be released soon:

Updated

The pictures from petrol stations today do show that some have been busy with motorists:

.... while others have been closed, awaiting deliveries.

The PRA pointed out this morning that the crisis has been focused in metropolitan areas, mainly in England, where higher population densities have created more demand for fuel.

Fuel crisis: Keir Starmer says key workers should get priority for petrol

Opposition Labour leader Keir Starmer has accused the government of leading Britain “from crisis to crisis”.

And he has called for key workers to be offered priority at the petrol pumps to ease the fuel crisis (an idea Boris Johnson suggested wasn’t necessary in his interview, as things are apparently improving).

At his party’s annual conference in the southern English seaside town of Brighton, Starmer told BBC News:

“The government has reduced the country to chaos as we track from crisis to crisis and the government is not gripping this.

“What I would do is give priority to key workers this week.”

Starmer also said he would issue enough visas for lorry drivers from outside Britain for a long enough period to make a difference [again, something Johnson pushed back against this afternoon].

Starmer insisted:

“The prime minister should take that action today, prioritise key workers and start issuing enough visas and for long enough.”

Our Politics Live blog has full details:

Q. With a gas price hike, trucker shortages, food shortages, queues, the army on standby - you’d call this a crisis if anybody else was in Downing Street, wouldn’t you?

Boris Johnson repeats that the recovery in the world economy is to blame for supply chain problems:

What we’ve got is a global economy that is recovering from what has been a once-in-a-century pandemic. And that has caused some particular shortages. I’ve mentioned a couple - HGV drivers and gas.

And those shortages are a function of huge global demand, but we’re meeting them and what we have is all sorts of plans in place to make sure that as we go forward into the new year, that we have everything necessary to protect our supply chains and keep things moving.

And he repeats that the fuel crisis is stabilising:

But as I said, what we’re seeing now, what we’re hearing now from industry, is that the situation on the forecourts in our petrol stations is stabilising.

Q: Shortages push up prices. Inflation is up, energy costs are up. People are going to be hard pressed this autumn, so are you looking at that issue ahead of the autumn statement?

Johnson says the government will do whatever it can, pointing to the increase in the living wage, and and wants to get people into high-wage employment.

He says there are real signs of progress:

Our plan for jobs is working, you’re seeing growth in employment, huge falls in unemployment.

And as I say, you’re seeing wages considerably above where they were before the pandemic.

[Wage growth has been strong, over 8% per year this summer, as firms have taken on more staff as lockdowns were lifted.

But there’s also a ‘compositional effect’; as more lower-paid staff have lost their jobs in the pandemic, average wages rise. That anomaly led the government to suspend the triple lock, otherwise pensioners would receive an 8% rise in payments next year].

Plus, this cost of living squeeze will be harder for families who lose their £20 uplift to universal credit next month:

Johnson: surge in petrol buying was 'totally understandable'

Q: Are you preparing for the potential that the lorry driver shortage gets worse? Are there any other contingency plans?

Boris Johnson says the “petrol pump business” was caused by a “slightly misleading account” that was leaked, and caused a big, “totally understandable surge in public demand”.

[he’s referring to reports that BP had told a meeting organised by the Cabinet Office that it planned to restrict deliveries of petrol and diesel to its service stations, due to a shortage of HGV drivers.]

Johnson says the UK isn’t short of very many lorry drivers in the fuel sector, but there is a shortage in the wider HGV profession around the world.

[And in the UK, with industry bodies reporting a shortfall of 100,00 drivers].

Johnson also rejects calls for to bring in more workers from abroad, saying this isn’t the way to build the economy:

What we want to see is a an emphasis on a high wage, high skill, high productivity approach to our economy,”

“What I don’t think people in this country want to do is fix all our problems with uncontrolled immigration.

“We tried that for a long time and in the end, people could see that it was leading to a low wage, low skill approach without enough investment in people or in equipment.

“That’s not the way we want the UK to develop and grow.”

Q: Shouldn’t doctors, nurses and other medical staff get to jump the queue at petrol stations so they can do their jobs without disruption?

Johnson says he understands why people say this.

But with the situation now stabilising, with things getting better on the forecourts, the best thing is if we stabilise it in the normal way, he replies.

Boris Johnson says the global economy is sucking in a huge amount of demand, for gas (where prices are at record levels), for lorry drivers, causing shortages around the world.

So the UK needs to have everything in place as the recovery continues.

Q: Are you saying there will be supply problems to Christmas and beyond?

Johnson says the government wants to be prepared for the impact of the global recovery on demand.

That’s why the government has relaxed competition rules (allowing fuel companies to work together to address the petrol crisis), and is making more drivers available if needed.

And he repeats that the petrol crisis is improving:

On the forecourts, the situation is stabilising and people should be confident and just go about their business in the normal way.

Updated

Boris Johnson: Starting to see fuel situation improve

Prime minister Boris Johnson has said the shortages of fuel at petrol stations is starting to improve.

Johnson says he sympathises with people who have been worried about their journeys, and whether they’ll be able to use their cars in the normal way, to see their loved ones or whatever they needed to do.

He know how frustrating and infuriating it must have been to worry about getting fuel.

And the PM points to signs that fuel availability is improving, after retailers signalled this afternoon that more fuel has reached petrol stations today.

We now are starting to see the situation improve. We’re hearing from industry that supplies are coming back onto the forecourts in the normal way.

Johnson urges people to go about their business in the normal way, and to “fill up in the normal way when you really need it”, and things will start to improve.

(reminder, Labour have criticised the government for suggesting the public are to blame for the situation, after days of heavy queues and shortages at petrol stations).

Johnson adds:

“What we want to do is make sure that we have all the preparations necessary to get through until Christmas and beyond, not just in supplying the petrol stations but all parts of our supply chain.”

Updated

Esso has also indicated that fuel availability at its petrol stations appears to be improving:

Petrol retailers: Early signs that crisis at the pumps is ending

There are ‘early signs’ that the crisis at the pumps is ending, forecourt operators say.

The Petrol Retailers Association says that more of its members are now receiving fuel deliveries, with fewer forecourts out of stock.

The PRA (which represents independent fuel retailers accounting for 65% of UK forecourts) is hopeful that the situation should continue to improve despite the shortage of truck drivers.

Gordon Balmer, the PRA Executive Director, says:

“There are early signs that the crisis at pumps is ending, with more of our members reporting that they are now taking further deliveries of fuel.

“Fuel stocks remain normal at refineries and terminals, although deliveries have been reduced due to the shortage of HGV drivers.

“We have conducted a survey of our members this morning and only 37% of forecourts have reported being out of fuel today. With regular restocks taking place, this percentage is likely to improve further over the next 24 hours.”

On Sunday, the PRA said that its members were reporting that anywhere between 50% and 90% of their forecourts were dry.

Britain’s supply chain crisis, and its knock-on impact on critical sectors such as fuel, will probably push up inflation and hit consumer confidence.

Matthew Oxenford, European analyst at Economist Intelligence Unit, fears the shortage of HGV drivers is going to hit consumers in the pocket, and cause further shortages in the months ahead:

“The UK is importing sufficient petrol to meet its energy needs - the crisis is largely a distributional one, where businesses have been unable to distribute it to local petrol stations owing to a shortage of qualified drivers.

“The drivers of this driver shortage are multifaceted, including a long-term decline in drivers due to extreme working conditions, and higher post-pandemic vacancy rates across industries (both trends that are common across the developed world) as well as the post-Brexit departure of many UK drivers based in Eastern Europe.

“The government’s proposals to address this crisis are likely to have only a modest impact. For example, the 5,000 temporary work visas are only a drop in the bucket compared to the estimated 100,000 estimated driver vacancies, and as a temporary fix is not likely to lure many drivers back from the EU where they can work permanently. Eventually we expect distributors to have to pay a premium for sufficient lorry capacity, which will translate to higher prices and exacerbate inflation further.

“The combination of labour shortages in critical sectors and higher energy prices is likely to prove increasingly inflationary in the coming months, and increase the likelihood of further temporary shortages in other sectors over the coming months. We have already seen consumer confidence decline in August and September, even prior to these shortages, a trend which is likely to continue.

Teachers should be prioritised for fuel, say unions

Teachers should be prioritised for petrol, according to a leading teaching union, which warned that the ongoing fuel shortages at petrol stations could disrupt education if the crisis was not resolved.

Patrick Roach, general secretary of the National Association of Schoolmasters Union of Women Teachers (NASUWT) said teachers working in areas without public transport had no choice but to rely on their own vehicles.

He said:

“Despite government assurances to the contrary, the continuing impact of shortages on fuel station forecourts is expected to cause serious difficulties for the provision of education

“Following many months of disruption, it is now of the utmost priority that the government takes steps to ensure that schools and colleges remain open and that teachers and education support staff are able to get to work.

“The government must urgently consider making teachers a priority group for access to locally available petrol and diesel fuel supplies.

Without such intervention, many teachers will struggle to get to their places of work on time, adding to the daily uncertainty and disruption faced by children and young people.”

Other teaching unions said there were no reports yet of fuel supply issues causing major problems for schools, though transport particularly for children attending special schools could soon become an issue.

Paul Whiteman, general secretary of the National Association of Head Teachers, said:

“So far, we are not hearing that fuel supply issues are causing major problems for schools, but if shortages go on much longer it is possible that children and teachers could find themselves unable to get to school – there could be problems with transport for special schools in particular.

“The last thing children need is further disruption to education given the experience of the last 18 months.”

Stop blaming public for petrol shortages, Labour tells ministers

Labour have launched a new attack on the prime minister’s handling of the crisis, saying Boris Johnson and his ministers needed to stop blaming the public.

The party said it was the government’s “toxic recipe of denial” and “boosterism” about labour shortages that had caused the problem.

Luke Pollard, the shadow environment secretary, said it was wrong for No 10 to say panic buying was behind the run on fuel stations.

The government should have planned better for shortages of lorry drivers that were predicted because of the way it carried out Brexit, he added.

“This is a playbook we’ve seen from the government for every crisis,” he said.

“Deny there’s a problem. Fail to plan for the problem. Blame the public for the problem. Blame someone else and then call in the army. It is utter incompetence.”

Ed Davey: Government's failure to prepare is to blame

Liberal Democrat Leader Ed Davey MP has criticised the UK government for not turning to the army sooner:

“It is unforgivable that military drivers are only now receiving the specialist training they need to drive fuel tankers. The Government had months to prepare for this crisis, but once again they are leaving it too late.

“Plans were put in place during the last fuel crisis to ensure military drivers could step in and drive tankers if needed. But the Conservatives failed to learn the lessons and keep these measures in place, causing unnecessary chaos and damage to people’s lives.

“This utter shambles shows how incompetent and out of touch Boris Johnson’s Government is. The public will rightly be angry that their lives have been thrown into turmoil yet again by the Government’s failure to prepare.”

Transport minister Grant Shapps denied earlier today that the government was too slow to put troops on standby - arguing that the fuel system was ‘just about coping’ until last weekend.

“There is a series of escalations that you go through in a crisis like this.

“The system was just about coping until last weekend and it would have been capable of continuing to do so.

“Unfortunately, as we have seen with toilet rolls and other things, once people start to pursue a particular item it can quickly escalate.”

And while Shapps says Covid-19 was the main cause of the driver shortage (delaying tests) he acknowledged that Brexit has had an impact.

“No doubt it will have been a factor. On the other hand it has actually helped us to change rules to be able to test more drivers more quickly.

“So, it has actually worked in both ways.”

The German freight industry has warned that the UK’s offer of 5,000 temporary visas to foreign truck drivers in the run-up to Christmas will not attract back drivers who left after Brexit.

Frank Huster, chief executive of the German Freight Forwarding and Logistics Association, told Reuters:

“The labour market on the European continent has gratefully accepted these workers - they are now lost to re-employment in the United Kingdom....

The UK is hoping that these short-term visas will fill the shortfalls in the haulage industry, while new domestic drivers are trained up.

Huster, though, predicts it won’t help bring back drivers:

“The new UK visa regulations - especially the temporary ones will not change this.

Welsh first minister: short-term visa offer is derisory, and won't work

The Welsh first minister, Mark Drakeford, has claimed the UK government’s scheme to allow foreign lorry drivers to work on short-term visas is arrogant and exploitative.

Speaking at first minister’s questions in Cardiff, Drakeford said:

“It’s hard to imagine a government that has made a more derisory attempt to solve a problem of their own creation.

“We are short of HGV drivers because [the Conservative] government took us out of the European Union.

The idea that people are going to be willing to uproot themselves and come and work in this country for a matter of weeks only to be told by the UK government that they will be discarded again on Christmas Eve. The arrogance of it is breathtaking - it isn’t going to work.”

He added that it was “so exploitative” that there was no prospect of it delivering what is needed (as haulage experts have also warned)

Updated

Shadow health secretary Jonathan Ashworth has said health and care workers should be given priority at petrol pumps to prevent “people losing their lives”, PA Media reports.

Labour MP Mr Ashworth was asked by BBC Radio 4’s World at One if fuel should be reserved for doctors, nurses and carers.

He replied:

“Yes, and we are facing a crisis, because if doctors and nurses, midwives, if care assistants cannot get to the bedsides of their patients, then people will be left stranded, people will be left in the most desperate of circumstances. Some people could end up losing their lives, that’s how serious this is.”

Mr Ashworth also called on Health Secretary Sajid Javid to meet with health and care unions to make an agreement about how to resolve the risks for patients.

He said:

“We need urgency and we need grip, we haven’t had that so far, so Sajid Javid, if you are listening to this now, get the workforce representative bodies on a call, and get an agreement because we cannot leave vulnerable, desperate patients stranded without the care they deserve.”

Petrol retailers: Extreme demand has eased, but still problems out there

UK petrol retailers have confirmed that there are signs of stabilisation today -- but warned there is ‘still a problem’ out there.

Petrol Retailers Association chairman Brian Madderson has told Sky News that the extreme demand levels witnessed over the weekend have eased somewhat.

But Madderson warns that PRA members (who represent 65% of all forecourts in the UK) are also reporting that some sites are still out of fuel.

There are still demand levels still above the norm, and as a result many of our members have sites dry. Many of the big groups are down to about 50% of sites.

There is still a problem out there.

There is still a bit of panic buying, there’s still queuing, but we are hopeful that we are seeing the first signs of a move towards equilibrium later in the week.”

With fuel companies replenishing sites, there will be some normality, Madderson predicts but that depends on people spending at normal levels.

He repeats his point from early this morning that the average ‘fill’ is £25 to £30 - so people shouldn’t fully fill up unless they need to.

Q: Why are there queues in some parts of the country and not others - with big queues in Surrey, but pictures of no queues in Edinburgh?

Madderson points to vehicle location density, which depends on population density.

The big metropolitan areas are seeing the highest demand, while demand is calming down in the central belt of Scotland (only about 20% above normal), and no problems in areas such as Northern Ireland and the Scottish Highlands and Islands.

Madderson says:

“It’s the big urban centres on the mainland in England which seem to have this problem of higher than average demand.”

One of the UK’s largest oil refineries says it has reached an agreement with UK tax authorities, which will give it more time to repay a deferred VAT bill.

Essar UK, which operates Britain’s Stanlow oil refinery, says it has entered into a new “time to pay agreement with HM Revenue & Customs”, with a phased payment schedule aligned with its revenues.

There were concerns that Esssar UK could collapse if it couldn’t strike a deal with HMRC over £223m of VAT deferred under the government’s pandemic support programmes, which it was due to start repaying this week.

Stanlow produces a sixth of UK petrol, so any disruption would have added to the UK’s supply chain problems.

Satish Vasooja, chief financial officer of EOUK, says the time to pay arrangement will give “significant runway to stabilise our balance sheet which has been adversely impacted by the pandemic”.

Essar UK also reports that it was busier than usual over the weekend, having put on more vehicle shifts to transport fuel - from 52 vehicle shifts per day in early August to over 70 today (and aiming for over 80 by the end of October).

Road fuel sales volumes from EOUK’s Stanlow, Northampton and Kingsbury terminals over the last weekend (25—26 September) were up 22% against a “normal” weekend (pre-Covid). On Friday 24 September sales volumes from the three terminals were up 14% on a “normal” Friday.

Updated

UK petrol boss says he does not condone profiteering as prices hit eight-year high

The boss of the UK’s Petrol Retailers Association has said he does not “condone profiteering”, as petrol prices reached an eight-year high and many filling stations ran dry amid panic buying.

Brian Madderson of the Petrol Retailers Association, which represents independent filling stations in the UK, called on them to think twice about putting up their prices.

“The one thing we do not condone is profiteering in situations like this,” he told BBC Radio 4’s Today programme.

He said:

“Most of our members, the independents, have a regular customer base and if they offend their customer base they don’t deserve to have them when this crisis is over,.

People have got long memories and I would urge anybody who thinks about trying to make a fast buck to think again because it just isn’t right.

Updated

Full story: Government to take over Southeastern after ‘serious’ breach of franchise

Another big transport story today: The UK government is to take over Southeastern railway services from the private operator, Go-Ahead, after an investigation uncovered a missing £25m in what it said was a “serious” breach of the franchise agreement.

London & South Eastern Railway, one of Britain’s biggest commuter networks, will come under direct public control from mid-October.

Transport secretary, Grant Shapps, said an investigation had found that since 2014 Southeastern had not declared more than £25m of historical taxpayer funding that should have been returned, and described this as a serious breach of the franchise agreement’s “good faith” obligation.

Shapps said the money had been recovered and further investigations were being conducted into historical contract issues related to the franchise, and further options for enforcement action including fines could follow.

It is understood the matter is to be referred to the Serious Fraud Office, although the Department for Transport did not comment.

Unions called for a wider fraud investigation and for Go-Ahead to be stripped of its other train operations.

Southeastern is run by Govia, a joint venture with France’s Keolis, dominated by Go-Ahead with a 65% share.

More here:

Updated

Shapps: First very tentative signs of stabilisation at forecourts

Transport secretary Grant Shapps says there are ‘very tentative signs’ that the fuel crisis is easing, and called on people not to take water bottles to petrol stations to fill with fuel.

In a pooled clip with broadcasters, Shapps says that a lot of petrol has now been transferred into people’s cars - and that petrol reserves at forecourts are stabilising.

He says:

“There are now the first very tentative signs of stabilisation in the forecourt storage which won’t be reflected in the queues as yet.

“But it’s the first time that we have seen more petrol in the petrol stations itself.

“As the industry said yesterday, the sooner we can all return to our normal buying habits, the sooner the situation will return to normal.”

Shapps says everyone needs to play their part -- and urges drivers not to do things like bringing water bottles to petrol stations.

It’s dangerous and extremely unhelpful.

Although this ‘very tentative stabilisation’ won’t be reflected in queues yet, it will mean fewer petrol stations being closed in coming days, Shapps adds.

Updated

Here are some photos from London today, via AP:

Drivers queuing for fuel at a petrol station in London
Drivers queuing for fuel at a petrol station in London today Photograph: Frank Augstein/AP

Updated

The British Medical Association has warned that health and care workers can’t afford to spend a few hours waiting for fuel, rather than caring for patients.

Dr David Wrigley, deputy chair of the BMA council, told Times Radio early this morning:

“I know many of my health and social care working colleagues will be getting into the car this morning, nervously looking at the fuel dial and wondering if they’ve got enough fuel to do their day-to-day work.

“We can’t be waiting two or three hours in a queue for fuel when we have patients to see, so we’re calling on the Government to act today, to put a plan in place and let us know what’s happening.”

Wrigley says that setting aside some fuel stations (as laid out in the Designated Filling Station scheme) for health and care workers would help.

“One example would be that a particular fuel station is designated for critical workers so we are allowed to get about our day-to-day jobs by getting the fuel that we need.

“It’s a critical situation where we’re unsure we’ll have the fuel to do NHS and social care work, so a plan does need to be in place.”

Petrol retailers: 'Panic buying' continues

Petrol retailers have warned that ‘panic buying’ of petrol is continuing today, with some filling stations still dry and others seeing heavy queues.

The chairman of the Petrol Retailers Association (PRA), Brian Madderson, told the Today Programme that social media is helping people track down where fuel is available.

Madderson says:

“Disappointingly the messages I’m getting this morning from our retailers are that panic buying does continue.

One of the reasons for this is social media. As soon as the tanker arrives at a filling station people on social media are advising that a tanker has arrived and then it’s like bees to a honeypot.

“Everyone flocks there and within a few hours it is out again.”

Q: But it’s not panic buying if you have a job to do, a sick or elderly relative to care for, or must get the family shopping in, is it? That’s entirely rational.

Madderson says people are panic buying by filling their tanks to the brim. Normally, the average ‘fill’ is about £25 - but petrol stations have seen fills over £100.

Q - So why not bring in £30 limits? (as EG Group has done at its petrol stations)

Madderson says this can be confrontational for staff, who have to decide if someone has genuine need for more than £30.

Q: Have you discussed with the government the possibility of a special initiative to allow essential workers to get access to petrol? (as groups such as the British Medical Association have called for)

Madderson says that under the national emergency plan for fuel, around 50% of sites are Designated Fuel Stations (DFS) for emergency workers.

But he argues that this is also a “very complex situation” for forecourt staff, who would have to decide who is an emergency worker and who isn’t, and what sort of credentials they need to present.

It’s a last resort situation, and hopefully we’re not there yet.

The government’s national emergency plan (online here) says that in the event of a severe national fuel supply shortage, emergency and critical service vehicles would be given priority access to road fuel from filling stations.

University Hospitals Birmingham’s fuel plan (online here) explains that essential users are identified by vehicle type and agency logos, while temporary logos would be available for essential health workers who don’t have a logoed vehicle, such as GPs, community nurses and midwifes.

Buses in Hertfordshire are reporting problems on the roads due to petrol queues:

Conservative MP Tobias Ellwood calls for army to be mobilised to drive fuel tankers

Conservative MP Tobias Ellwood has called for the army to be mobilised to hep fix the fuel crisis.

Ellwood, who chairs Parliament’s Defence Committee, told Sky News that bringing in the military will help restore public confidence.

Ellwood said the government needs to get ahead of the problem, as “simply hoping this situation will return to normal is not a strategy”.

“We have gone from 1% fuel pump shortages to 90% so altering people’s buying behaviour to prevent the panic buying and going back to previous purchasing patterns requires regaining the confidence of the nation.

“I believe the army should not just be put on standby but in fact mobilised, be seen to be used.

“That will help ease the pressure on shortages of course, it will return public confidence, and then on top of that there is the bigger issue about articulating a clear strategy to alleviate the chronic shortage of lorry drivers.”

EU visas are only an interim step, Ellwood says - the UK also needs to attract younger people into the industry, improve pay and conditions in the sector, and communicate this to the public.

Ellwood rejects the suggestion that having soldiers driving fuel tankers will hurt public confidence; the army have already helped in the pandemic, so people are used to seeing soldiers in fatigues supporting services

The panic is seen when you see the lines, the queues, outside petrol stations or indeed then the petrol stations close themselves.

Ellwood says he couldn’t find a petrol station open in his Bournemouth constituency on Friday night as they had all run dry.

And on the temporary visas being offered to lorry drivers, Ellwood says the government needs to look deeper into the challenges in the industry, and accept the impact of Brexit on the labour market.

No doubt about it. You’re kidding yourselves if you don’t recognise that Brexit has changed the landscape. It would be naive to say otherwise.

Brexit has increased bureaucracy in customs and regulations for lorries entering and departing Britain, he says; with Covid-19 on top of Brexit, the UK has lost a large chunk of its workforce.

“That’s what we voted for,” he continues, but the government needs to mitigate that by filling the gaps where EU workers provided support.

And he also agrees that drivers on the continent will want job security before coming to the UK - why would they bother coming for just three months? (as the government is offering).

Updated

How is the supply chain and fuel crisis affecting you?

Whether you work at a petrol station, travel for your job, care for loved ones, or rely on a vehicle for other essential journeys, we would like to hear how fuel shortages have affected you.

We’re particularly interested in hearing from key workers and their experiences.

We’d also like to hear from new and experienced hauliers about how the situation, and from other parts of the haulage industry, including employers about how they’re coping with the staffing crisis.

RSM: Fuel shortages not a threat to the economy, yet

Tom Pugh, UK economist at RSM, says the fuel shortages won’t cause much damage to the economy -- as long as they are resolved quickly.

But should they extend beyond this week, growth could be hit, he writes:

The well-publicised fuel shortages, which have seen 90% of petrol stations running out of fuel and hours-long queues for those that haven’t, probably won’t make much of a difference to the economy if they end this week as is widely expected.

But if the pumps stay dry for much longer, then the impact of people unable to go about their work and daily lives may join labour shortages, soaring energy prices and a lack of shipping containers as another drag on the economy.

Companies will suffer if employees spending hours queuing for petrol instead of working, or can’t work at all. If delivery firms struggle, then the existing supply chain problems will worsen.

Before the pandemic, about 50% of workers drove to work. That figure may be a bit lower now due to homeworking, but a large part of the workforce will still need fuel to get to work.

What’s more, a shortage of fuel for trucks and delivery vans risks exacerbating the shortage of goods which has been hampering the economic recovery. This will inevitably be a drag on GDP growth in September compared to if there were no shortages.

Pugh also warns that rising prices at the pumps will hit consumers (petrol prices are the highest since 2013).

There is also some evidence that some petrol stations are putting up prices in response to the surge in demand.

Given that motor fuel makes up around 2.7% of the CPI basket, a 10p per litre increase in the price of fuel would add about 0.02 percentage points to inflation in September. This doesn’t sound like a lot, but when inflation is already above 3% and rising it will add to consumers’ misery.

Irn-Bru maker AG Barr reports haulage problems

Irn-Bru maker AG Barr has revealed that the UK’s HGV and supply chain issues have made it harder to deliver its drinks.

In its latest financial results, AG Barr says it is seeing a pick-up in supply chain issues:

In recent weeks we have seen increased challenges across the UK road haulage fleet, associated in part with the COVID-19 pandemic, impacting customer deliveries and inbound materials.

In addition, the risks associated with the wider labour pool and the current COVID-19 pandemic response are areas we continue to monitor closely.

AG Barr also warns that cost inflation will increase, due to “the well documented pressure on supply chains and rising commodity prices”.

The company also reported a rise in sales and earnings, as the reopening of hospitality venues lifted demand. AG Barr’s revenues rose 19.5% in the six months to 1 August and pre-tax profits jumping 42%.

Its cocktail business Funkin saw strong growth, with sales of its ready-to-drink cocktails up 150%.

Updated

Care workers are reporting that problems buying petrol will hit their work:

Care home owner Mike Padgham, who chairs the Independent Care Group, says that social care staff should be prioritised alongside healthcare workers if necessary, including those who look after people in their own homes.

We’re asking for them to be given priority access to fuel at garages, should that be necessary, he told Good Morning Britain.

More reports of disruption in London this morning, as roads snarl up as drivers queue for petrol:

ITV’s Nick Dixon reports that the Shell garage in Tunbridge Wells was open early this morning, and the queue wasn’t too bad.

But while it had diesel, it ran out of unleaded just before midnight.

Dixon explains:

They had 8,000 litres [of unleaded] from four o’clock yesterday, but that was gone by midnight.

Normally the staff tell me that would last for a couple of days.

Labour: fuel crisis down to government incompetence and handling of Brexit

Labour’s shadow home secretary has said the fuel shortage at petrol stations is down to the Government’s “utter incompetence” and its “handling of Brexit”.

Nick Thomas-Symonds was asked by Times Radio if Brexit was a factor in the crisis.

He replied:

“It is to do with the Government’s complete and utter incompetence.

“It is to do with the Government’s handling of Brexit and it is to do with the Government’s failure to plan over recent months. The blame lies squarely with them, it lies with no-one else.”

Yesterday, Germany’s front-runner to replace Angela Merkel as chancellor said the UK’s truck driver shortage was due to the end of freedom of movement after Brexit.

Olaf Scholz of the SPD party said:

“The free movement of labour is part of the European Union, and we worked very hard to convince the British not to leave the union.

“Now they decided different, and I hope that they will manage the problems coming from that, because I think it is constantly an important idea for all of us to make it happen that there will be good relations between the EU and the UK, but this is a problem to be solved.

Bloomberg: UK Fuel Panic Deepens the Pain in Crisis-Prone Economy

Businesses are warning that petrol shortages will hit them hard, if the problem isn’t resolved quickly.

Bloomberg says the shortages of petrol and diesel will have repercussions for the U.K.’s “crisis-prone” economy.

Sof Arnaoutis, the owner of Excel Plumbing and Heating Supplies in north London, told them yesterday that firm had already been struggling to get supplies from overseas because of a driver shortage. 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.”

Here’s more details:

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.

Brent crude hits $80

Energy news: Brent crude has hit its highest level in three years, as the surge in oil prices threatens to push up costs for consumers and businesses.

A barrel of Brent crude, the international benchmark, has jumped to $80.50 per barrel this morning - a level not seen since 2018.

Analysts believe oil will continue to rise, as demand is strengthening and supplies remain tight.

Naeem Aslam, chief market analyst at Think Markets, says:

Fears of an energy crisis in Europe are supporting oil prices that have been rising for seven days in a row, with Brent, the benchmark for crude oil, climbing above $80 per barrel.

The surge in gas prices has made oil a relatively cheaper substitute for power generation and hence its appeal has increased. Similarly, India, the second biggest importer of crude oil, has also ramped up its oil imports, to a three-month high in August, as refiners begin to stock up as they project higher demand going forward.

Introduction: Petrol crisis continues

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone, business, and the UK’s supply chain crisis.

Britain has woken up to another day of disruption to fuel supplies, after problems shipping petrol and diesel to forecourts led to shortages and panic buying in recent days.

There are fears that vital services will be disrupted as the impact ripples through the economy.

Transport groups are already reporting problems on the roads again this morning, as queues at petrol stations with fuel for sale build up in the early morning rush.

Southdown buses, who operate in Kent, Surrey and Sussex, is warning of queues and delays.

And there are problems on other roads as motorists try to fill up.

Other petrol stations remain short of some grades of fuel, or are dry, as the industry struggles to ship fuel to forecourts fast enough.

Yesterday, the fuel industry said there was “plenty of fuel” at UK refineries and terminals, and that it expected demand “will return to its normal levels in the coming days”.

They’re hoping that demand will tail off after the weekend rush:

“As many cars are now holding more fuel than usual, we expect that demand will return to its normal levels in the coming days, easing pressures on fuel station forecourts. We would encourage everyone to buy fuel as they usually would.

But many people are trying to get fuel for their normal activities, such as key workers in the health service. Pressure is growing on the government to give ambulance drivers, healthcare staff and other essential workers priority access to fuel.

The British Medical Association (BMA) warned that as pumps run dry “there is a real risk that NHS staff won’t be able to do their jobs”.

A midwife at a hospital in Surrey told the i newspaper that the situation was “infuriating”.

On Monday morning she was an hour late for work after trying five fuel stations on her way in from Brighton.

“NHS workers are on their knees. The workload is relentless and we do not have the extra capacity to search and stress for fuel to get to work. Who is prioritising key workers?”

Schools also fear that they could be forced to return to online teaching, if staff, pupils or suppliers can’t get onside.

Businesses are also warning of problems.

David Brown, chair of National Courier and Despatch Association, a trade body, said delivery companies were turning down jobs and telling workers to stay at home because of a lack of certainty around fuel supplies.

“It has been difficult,” he added (via the Financial Times)

“It has been frustrating for people who earn a living from driving.”

Yesterday, the government put army drivers on standby to help deliver petrol and diesel if needed - but stopped short of an immediate deployment

Kwasi Kwarteng, the business secretary, said it was right for the government to take “sensible, precautionary steps”.

“The UK continues to have strong supplies of fuel. However, we are aware of supply chain issues at fuel station forecourts and are taking steps to ease these as a matter of priority,” he said. “If required, the deployment of military personnel will provide the supply chain with additional capacity as a temporary measure to help ease pressures caused by spikes in localised demand for fuel.”

The agenda

  • 7am BST: German GfK consumer confidence survey
  • 1.30pm BST: US house price index for July
  • 3pm BST: US consumer confidence report for September

Updated

 

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