Fuel supply crisis: UK suspends competition law to get fuel to petrol stations

The UK government is to suspend competition law to allow oil firms to target fuel deliveries at petrol stations following recent panic buying.

Officials said the measure will make it easier for industry to share information so that they can prioritise the delivery of fuel to the parts of the country and strategic locations that need it most, report BBC.

The move came after days of long queues at the pumps, after fears of disruption to the fuel supply sparked panic buying.

Ministers are also considering deploying the Army to deliver fuel.

The Petrol Retailers Association has warned that as many as two-thirds of its membership of nearly 5,500 independent outlets are out of fuel, with the rest of them "partly dry and running out soon". The UK has a total of more than 8,000 filling stations.

Announcing the measure to exempt the oil industry from the Competition Act 1998, Business Secretary Kwasi Kwarteng said the government had "long-standing" contingency plans to maintain fuel supplies.

"While there has always been and continues to be plenty of fuel at refineries and terminals, we are aware that there have been some issues with supply chains.

"This is why we will enact the Downstream Oil Protocol to ensure industry can share vital information and work together more effectively to ensure disruption is minimised.

"We thank HGV drivers and all forecourt staff for their tireless work during this period."

The government also relaxed competition law in March 2020, to help supermarkets work together to maintain food supplies.

A shortage of lorry drivers has caused problems for a range of industries in recent months, from supermarkets to fast food chains.

In recent days, some fuel deliveries were affected, leading to panic buying and lengthy queues at some petrol stations.

In a joint statement from companies including Shell, ExxonMobil and Greenergy, the industry reiterated that pressures on supply were being caused by "temporary spikes in customer demand - not a national shortage of fuel".

PRA chairman Brian Madderson told the BBC the shortages were down to "panic buying, pure and simple", with oil companies prioritising keeping motorway service station pumps topped up.

Pumps were mainly running dry in Britain's urban areas, while Northern Ireland was currently unaffected, he said.

What is competition law?

Competition benefits consumers. It encourages firms to innovate and improve their offer to draw customers in. It can mean products are better, often at lower prices.

It also aims to make sure firms compete on a level playing field, as well as protecting them from other businesses acting unfairly.

It stops businesses from making agreements with each other that would distort competition, leaving customers worse off. Agreeing to fix prices for certain goods or services, limiting production to drive prices up, or carving up markets, for example, could all end up breaking competition law.

That risks serious fines, people being banned from running companies, or even jail.

During the pandemic, the government has intervened to exempt certain industries from elements of competition law. At the height of the coronavirus crisis, for example supermarkets were allowed to share more information with each other on stock levels and share depots and delivery vans, to meet customer demand.

The latest move will allow fuel suppliers to share information on which locations are most in need and, according to the Petrol Retailers Association, possibly put fuel into their competitors' sites - which they would not typically be allowed to do.

Andrew Opie, director of food and sustainability policy at the trade association, told the BBC: "I think we're going to see less choice, less availability, possibly a shorter shelf life as well, which is really disappointing because this could have been averted."