Petrol stations ‘will be forced to close’ as fuel prices plummet
Petrol stations across the UK could be forced out of business due to falling prices caused by the coronavirus outbreak, according to a trade association.
The Petrol Retailers Association (PRA) has warned that rural filling stations are particularly vulnerable as fuel prices fell by their biggest amount in nearly 20 years.
Filling stations are permitted to stay open during the current lockdown but the PRA has warned many face a fight for survival as falling prices are made worse by a drop in demand.
In a statement, the PRA, which represents independent fuel retailers who account for 70 per cent of UK forecourts, said: “Many petrol stations will have to close in the coming weeks, as sales of fuel dry up and their businesses become unviable."
According to government data, the average price of a litre of petrol has fallen by 8p per litre to £1.12 in the last seven days, with diesel falling 4p per litre to £1.19, and some retailers charging less than £1 per litre for unleaded. It represents the biggest one-week drop since 2003.
The drop has been driven by falling global demand for oil, and the decision by Saudi Arabia not to limit production and to cut prices in recent weeks. However, many retailers bought their supplies days or weeks ago, meaning they paid far more than current prices.
At the same time, the Government order for people to stop all non-essential travel means demand for fuel has slowed, with filling stations’ income affected.
PRA chairman Brian Madderson said: "To help freight move and help key workers travel safely and independently through this period of crisis, petrol filling stations must remain open but this is proving to be a challenge.
"Fuel retailers are having to maintain pump prices at previous levels to avoid suffering significant stock losses."
A spokesman for the Department for Business, Energy and Industrial Strategy said: "The Government has robust contingency plans in place to ensure that fuel continues to be available to the public.
"Forecourt closures have so far been extremely limited but we are keeping the situation under close review and continue to engage with industry to monitor stock levels at forecourts across the UK."