Fuel panic buying confirms why fuel supplier loyalty is essential

Fuel Crisis 2021

As we reach the end of October, we reflect on what has been a historic month within the fuel industry and for the UK. With the price of fuel being it’s highest in about 8 years and a month-long back log from panic buying, we want to look back on what has happened over the last month and our view as a fuel distributor.

The fuel crisis began on the 23rd of September 2021, when a major refiner released a statement that they were having to close a few petrol stations as they were experiencing driver shortages and therefore, were struggling to get deliveries to every forecourt. The shortage noted as only being ‘temporary’. This statement caused nationwide panic that there is a shortage of fuel, which in turn generated panic buying across the UK. By the end of that following weekend, most petrol stations had completely run out of both petrol and diesel and people were being turned away, this heightened the panic amongst the public.

Currently, within the UK, we are short of about 90,000 lorry drivers across all sectors not only in the fuel industry, but also in the food and construction industries due to various reasons. This situation is currently being addressed by Government with the change of laws around HGV drivers, the whole process of getting an HGV driver license is trying to be sped up. To help relieve the situation happening within the UK, the Government offered short-term visas for overseas drivers to come and assist. Meanwhile, the armed forces were deployed to help deliver fuel, it was reported that it would take about 10 days for the forecourts to be replenished.

The question remains of what this crisis caused for the rest of the industry, especially fuel distributors like us who don’t supply forecourts. We found that the panic buying wasn’t restricted to just consumers at petrol stations, but in fact it caused panic in everyone including many businesses. Customers who use fuel cards to fuel at retail stations were looking to utilise bulk storage in other depots which increased volume requirements, as well as many businesses reliant on fuel for critical power were filling fuel tanks to max storage to ensure they had full contingency should there be any supply issues. We reassured our customers that we were not affected from the shortage of drivers and that we had a completely normal supply of fuel, however that we were extremely busy, and our delivery lead times were longer than usual.

Everyone wanted to order their fuel with urgency which meant we had to prioritise our deliveries and extend our standard delivery windows. We prioritised our contracted key customers and then ensured we next supplied preferred supply customers, and lastly spot market buyers which allowed our service level to remain high for our key customers.

We want to mention the importance of being loyal to your fuel supplier, this has been proven during this difficult period and shows why it is essential. We always ensure we put our loyal customers first, making sure their businesses are kept running at all costs. With prices at their highest in a long time, we understand it is extremely difficult, but we are committed to providing a delivery to depend on, with a reliable and agile service to all customers.

Our current and prospective customers all have different buying strategies, some that prioritise security of supply with committed volumes and agreed SLAs, and others that like the freedom to put their volume wherever the best price may be on that day, but the recent situation has certainly highlighted the benefit of a more committed position that guarantees the security of supply and service during busy periods.

Now may be the time to review your fuel buying strategy to guarantee more supply security in readiness for busy times. Whilst the recent crisis is an infrequent occurrence, the winter periods bring similar pressure to distributors with B2C demand increasing from November through to March meaning us and our competitors have to prioritise commercial deliveries to those in contracted and secure supply positions.

To talk to us about becoming a contracted key customer or any other ways to mitigate supply concerns please email enquiries@thewp-group.co.uk

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