On September 27, the average price per liter of gas in the U.K. reached an eight-year high. Prices for petroleum reached 135.19 pounds and are continuing to rise. Gas stations have dried out, and panic buying has ensued as the country’s various industries reliant on gas grow ever more weary.
Unlike what many would assume, this inordinately high gas price is not due to a lack of gas but rather a lack of truck drivers. The U.K. is perfectly able to provide all of its nearly 8000 stations with fuel. However, according to the Petrol Retailers Association, who owns almost 5500 of the 8000 gas stations in the U.K., over a quarter of gas stations were empty by September 30. The key to this shortage lies with the truck drivers who transport fuel to gas stations. To operate the vehicle necessary to transport petrol, drivers must acquire a Heavy Goods Vehicle (HGV) license. In the U.K., the Road Haulage Association estimates that there is currently an industry shortfall of over 100,000 licensed drivers. As such, fuel in the U.K. (and in Europe at large) fails to reach its intended destinations.
Several factors have led to the deficit in the workforce today. For one, as aging drivers gradually retire, few young drivers are joining the aging workforce—something only further expedited by the pandemic. Brexit is another factor we must consider when looking at the deficit in the workforce. After leaving the European Union, the U.K. was no longer part of the EU free movement rule that allowed workers to seek work in any country in the EU without requiring a permit. Therefore, around one fifth of the deficit in HGV drivers can be attributed to Brexit.
Whether or not actions to remedy this shortage have been effective remains debated. Prime Minister Boris Johnson and Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng claim that the crisis is stabilizing, though Labour Party leader Keir Starmer criticizes the government’s responses to the situation. Methods the U.K. has taken in order to subdue the shortage include steps for short-term relief while a longer-term solution is being prepared. To increase the supply of deliverable gas, four steps had been taken. Firstly, 150 qualified military drivers and another 150 support personnel have been recruited to aid with the immediate shortage, though this is unlikely to create any substantial difference considering the lack of 100,000 drivers. Secondly, the Department for Business, Energy and Industrial Strategy will draw upon some of the 80 fuel tankers that it keeps for emergencies. Thirdly, the U.K. will also give out 5000 working permits to drivers that lasts for three months or until next year. Once again, 5000 temporary drivers does not seem comparable to the need for 100,000 more drivers. Lastly, the process required to acquire certifications as a HGV driver has been expedited. Besides trying to increase the supply of gas, the competition law has been suspended and a 30 pound limit per person on the purchase of fuel has been imposed. The 30 pound limit helps curb the strain panic buying had placed on the supply of gas. Smarter and more efficient allocation of gas is made possible by the suspension of the competition law. The competition law was meant to keep companies from colluding with each other and fixing prices. By suspending this law, gas companies are able to communicate data with each other and work together to prioritize resources and locations that require more attention.
Beyond the actions of the government and gas prices soaring to recent highs, what are some consequences of the fuel shortage that are not immediately apparent? Many industries rely on fuel to operate. A taxi driver cannot work without fuel. Steve McNamara, the general secretary of the Licensed Taxi Drivers Association, said that 25 to 30 percent of drivers in the association were not operating due to the shortage. Restaurants and supermarkets are also unable to deliver and transport food to replenish supplies.
Even though fuel sits in refineries, it seems as though supplies dwindle. Our world runs on gas, and the U.K. is no exception. Kwarteng said in a tweet on September 29, “the sooner we can all return to our normal buying habits, the sooner the situation will return to normal.” Buying habits must return to normal, including the ceasing of panic buying. The industries reliant on fuel must be allowed to operate once again without delay. As the U.K. lingers in a gas-hungry dazed state, it becomes harder and harder to return to normal each subsequent day. Quick decisive action is key in the recovery of normal.
By: Jonathan Ji