'Temporary shortages': Asda boss issues petrol warning over Middle East war
There are “temporary shortages” at some petrol pumps due to the ongoing conflict in the Middle East, the boss of one of the country’s biggest supermarkets warned, as the price of petrol jumped above 150p per litre for the first time in almost two years.
Allan Leighton, executive chairman of Asda, which is the UK’s second largest fuel retailer, claimed that elevated demand from customers had led to a small number of local “spikes”, but said there were not issues nationwide.
Fuel Industry UK, which represents the fuel sector, said the supply of petrol and diesel is “stable”.
Petrol and diesel prices have lifted significantly since the end of February after the war between Iran and US-Israeli forces led to disruption in the production and supply of oil from the Middle East.
Iran has effectively blockaded the Strait of Hormuz, a narrow strip of water on the shipping route out of the Gulf.
The average price of unleaded petrol has risen by more than 17p a litre since the end of February to 150.11p, according to fresh RAC data.
RAC head of policy Simon Williams said: “Petrol has now broken through the unwelcome milestone of 150p a litre, something drivers haven’t seen since mid-May two years ago, while the average price of diesel is now approaching 180p at 177.68p.
“With the long-awaited four-day Easter weekend almost within touching distance, the cost of getting away by car is going to be noticeably higher this year.”
According to the Government’s fuel finder, some petrol stations near Richmond, North Yorkshire, are now charging almost 180p per litre for petrol.
Mr Leighton said the retailer has seen bumper demand from drivers in response to the volatility in prices.
He stressed the issue has only affected “the odd pump” at a small number of its petrol forecourts, highlighting no forecourts have been fully short of fuel.
He said: “Our fuel volumes are up quite significantly and clearly demand has been outstripping supply. Supply is tight and we are all trying hard on that.
“The issue is a temporary one, and some could see issues when we are waiting for delivery, and we can expect to see that continue.
“The spikiness at the moment makes this tricky for us, as spikes can lead to temporary shortages. These are temporary and are addressed very quickly.”
Last year, around 90 per cent of crude oil refined in the UK – which is used to produce petrol – was imported, with around 1 per cent of this imported from the Middle East, with most coming from the US and Norway.
Around 7 per cent of diesel is imported from the Middle East. However, in Asia the majority of its oil comes via the Strait of Hormuz, which is having a knock-on effect globally.
Lloyd’s List Intelligence shipping information firm has indicated that Iran has started to operate a “de facto toll booth” system along the shipping lane.
Ships must enter Iranian waters and be vetted by Iran’s Islamic Revolutionary Guards Corps. At least two vessels have paid for passage.
At least 18 ships have been hit and at least seven crew members have been killed since the war started, according to the UN’s International Maritime Organisation.
Entities that want their vessels to pass safely through must submit their details to what Lloyd’s List Intelligence refers to as “approved intermediaries” of the Revolutionary Guard, including the cargo, owners, destination and a complete crew list.
Approved vessels receive a code and are escorted by an IRGC vessel. Oil is prioritised and vessels are subject to “geopolitical vetting”, Lloyd’s said.
“While not all ships are paying a direct toll, at least two vessels have and the payment is settled in yuan,” Lloyd’s List said, referring to the Chinese currency.