UK drivers face higher petrol prices as army troops deployed to help with fuel deliveries

Vehicles queueing to fill up at a BP petrol station in London on Oct 2, 2021. PHOTO: REUTERS

LONDON (BLOOMBERG) - Drivers in Britain are heading into a second working week of petrol shortages, with the threat of higher prices adding to pressure as the government deploys army personnel to ease the crunch.

The Royal Automobile Club warned last week that average prices could £1.43 (S$2.60) per litre of petrol in the coming weeks, up from £1.37.

FairFuelUK, a consumer advocacy group, said that prices on Sunday (Oct 3) had risen by four to five pence since last Thursday, a jump not justified by an increase in crude prices. They see a litre averaging £1.50 by the end of October, the highest on record.

Mr Cristian Jaramillo, a worker at a London petrol station, says he has already had to raise prices this week. "They've been rising quite fast actually. I think last week I did it once and probably some of my colleagues (did too)."

The government has struggled to show it has a grip on the crisis, with images of petrol queues threatening to undermine confidence in Prime Minister Boris Johnson's Conservative Party as it holds its annual conference in Manchester.

The situation prompted Mr Johnson, who led the campaign for Britain to leave the European Union, to temporarily ease visa restrictions for foreign truck drivers and free up 200 members of the military to help with fuel deliveries, starting Monday.

While there were some signs of improvement over the weekend, queues remained common in London and the South East, with some stations still out of petrol. Shell's British twitter feed was filled with comments from motorists desperate to find petrol or complaining about price increases.

On Sunday morning, about one in five petrol stations in the South East, which includes London, was out of fuel, the Petrol Retailers Association (PRA) told the BBC. That was closer to 6 per cent in the Midlands, northern England and Scotland, the association said.

The PRA was not immediately available to comment on the price issue.

A worker at a Shell station in London on Sunday morning said that some independent stations are putting prices up by as much as 10 pence a litre. Sunday was his busiest day since the crisis started and he expected to run out of fuel in the afternoon.

Mr Johnson on Sunday defended his government's handling of the situation in an interview with the BBC, saying fuel supply issues were "abating" and that the truck driver shortage was not just an issue in Britain.

"What you have got at the moment is a shortage of lorry drivers, of truck drivers, that is affecting the whole world," he said.

For Britain, he said, pulling "the big lever marked 'uncontrolled immigration'" was not the way forward.

His government has been stung by criticism that it failed to prepare for supply shortages and disruption, which have been exacerbated by the pandemic but which ministers grudgingly concede is caused in part by Britain's split from its biggest trading partner.

The crisis so far has not seriously eroded support for the Conservatives, but that could change. The government was forced to announce tax increases to pay for its pandemic relief. This threatens to sour the mood of voters at a time when prices for many goods are already rising and supply issues threaten to disrupt the Christmas holiday season.

In August, British inflation hit 3.2 per cent, its highest level in more than nine years, making it increasingly likely that the Bank of England's year-end 4 per cent forecast will be reached.

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