ALEX BRUMMER: Don’t blame Brexit, Covid or the media for the fuel crisis… it’s big oil that should have done better
Polling shows that the public regards the media as responsible for the fuel crisis, ahead of the Government and oil industry.
The messenger is an easy target. But would citizens prefer being kept in the dark as they might be in China, which currently is going through its own energy travails.
My candidate for blame is big oil. Shell, BP, Exxon are among the richest companies in the world, which measure investment in the tens of billions of dollars.
Queues: With each forecourt closure local storage capacity and the resilience in fuel supplies is diminished
Admittedly, they are at the start of a dramatic transition from oil and gas to carbon neutral fuels.
However, the reality is that just 10 per cent of cars on UK roads are electrified or hybrid, although the numbers are expected to escalate dramatically to 40 per cent in the next few years.
Given the current balance of demand, companies with the resources of big oil ought to have recognised from the day of the Brexit referendum more than five years ago the importance of enhancing refining capacity, keeping fuel stocks high and putting in place training and higher wages so that there are sufficient tanker drivers of their own or contracted on the roads.
In an age of advanced data management, big oil should have seen this coming. Complaining about the lack of HGV testing in the time of Covid – the numbers licenced fell dramatically by 17,000 to 24,600 drivers in 2020 – doesn’t really cut it as an excuse.
When the queues formed outside Northern Rock bank branches in the autumn of 2007, the precursor of the financial crisis, the then head of the CBI remarked it made Britain look like a ‘banana republic’.
If that designation is still politically correct, it could also apply to empty garage forecourts and the queues congesting the nation’s thoroughfares.
A logistics analyst formerly with big oil placed what is happening in some context.
Consumers are very conscious of bank branch closures, with Virgin Money slamming the doors on another 31 branches. Parallel to this, petrol forecourts have also been shutting in great numbers.
In my own neighbourhood of south-west London, two petrol stations have made way for chi-chi housing and others are being converted into electric charging stations.
That may be forward looking, but with each forecourt closure local storage capacity and the resilience in fuel supplies is diminished.
Similarly, overseas, financially-driven ownership of refineries and storage has affected command and control.
Sensible commercial organisations such as Boots, a vital supplier to the NHS and consumers, have their own transport fleets and fuel storage at depots.
Government needs to engage more intensely with big oil on refinery and storage capacity and the number of forecourts.
The oil and gas companies are not short of facilities, either upstream, pumping oil and gas, or downstream where they serve enterprise and consumers.
Shell chief executive Ben van Beurden and BP’s Bernard Looney are two of the highest paid bosses in the land. They should get a grip.
Who needs Nasdaq? The decision of Gordon Sanghera, chief executive of Oxford Nanopore, to float the life sciences group in London has paid off handsomely.
Demand for the stock from some of the biggest global fund managers was intense on first day trading, driving the shares up 45 per cent, placing a value of just under £5billion on the group.
That puts it on a par with the firms in the lower echelons of the FTSE 100. Covid underscored the value of British life sciences, genomics and our great research universities.
The Association of British Pharmaceutical Industry has just published its budget demands.
It wants an update to R&D tax credits, bigger capital grants for research capacity in the NHS and empowering the MHRA, which did such a good job in ushering the Oxford-Astrazeneca vaccine to market.
It is not about picking winners, it is about backing them.
Boohoo shares have taken a big tumble after sales increases moderated and margins were squeezed.
The US sales drop from a 43 per cent gain in the first quarter to 8 per cent in the second is a little disturbing.
But are higher costs really bad for a company with reputational issues? If the cash is going into higher wages and remedying ghastly conditions in the fast fashion group’s supply chain that would be a good thing.
Next stop should be cleaning up disclosure, regularising governance and transferring from AIM to the main market, which requires higher standards.