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U.K. May Ease Trucker Visas; EG Caps Fuel Buying: Energy Crisis

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·7-min read
U.K. May Ease Trucker Visas; EG Caps Fuel Buying: Energy Crisis
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(Bloomberg) -- The U.K. looks set to allow thousands of European truckers to work temporarily in the country, as the government seeks to quell panic-buying at gas stations triggered by a shortage of fuel-delivery drivers.

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EG Group, owner of the Asda retail brand, will limit each customer to 30 pounds on all grades of fuel because of what it called unprecedented demand. Some BP Plc stations were short of at least one grade, and Royal Dutch Shell Plc said it’s rescheduling fuel deliveries.

Voters in the country now face growing shortages of fuel and food, and an increase in living costs. Despite riding to power on a Brexit campaign that pledged to cut immigration from the European Union, Prime Minister Boris Johnson and his cabinet are now preparing a policy U-turn.

Key insights:

  • Several Shell stations in the London area ran out of fuel on Friday.

  • Queues show that Brexit red lines are starting to crack.

  • Johnson has cleared the way for a rapid fix to the delivery driver shortage, the Financial Times reported.

  • Windier weather and a new power cable from Norway to alleviate some of the pressure.

EG Group Limits Fuel Purchases (11:21 p.m. U.K.)

EG Group said it will introduce a limit of 30 pounds per customer on all grades of fuel amid “unprecedented customer demand for fuel and associated supply challenges.”

All of EG Group’s U.K. sites remain open and operational, according to an emailed statement. The limit doesn’t apply to heavy goods vehicle and emergency services drivers.

U.K. Set for Trucker Visa U-Turn (5:00 p.m.)

The government is set to issue as many as 5,000 short-term visas for European truck drivers, according to a report in the Telegraph late Friday. Home Secretary Priti Patel has dropped her earlier opposition to such a plan, the newspaper said.

“We’re looking at temporary measures to avoid any immediate problems,” a Downing Street spokesperson said in a statement earlier. “But any measures we introduce will be very strictly time limited.”

Sainsbury Closes Some Pump Stations (6:09 p.m.)

U.K. retailer Sainsbury has closed a few pump stations in the country, which has been beset by panic buying as a lack of truck drivers disrupts deliveries.

“A tiny proportion of our petrol filling stations are temporarily closed,” the company said by email. “All our sites are receiving more fuel and we’ll reopen again as soon as possible.”

Fuel Queues Highlight Brexit Fallout (5:17 p.m.)

The red lines of Boris Johnson’s Brexit project are starting to crack as voters face growing shortages of food and fuel, as well as a marked rise in living costs.

Despite riding to power on a Brexit campaign that pledged to cut immigration from the European Union, Johnson and his ministers are now considering what would be a significant and politically damaging U-turn: Tapping those same EU workers to plug the labor shortages crippling parts of the U.K. supply chain.

Some Shell Stations Without Fuel in London (5:07 p.m.)

Several Shell filling stations across London and the South East ran dry on Friday after the rush for fuel, according to Bloomberg journalists in those places.

Shell declined to elaborate beyond a previous statement that said the company is rescheduling fuel deliveries in the U.K. amid an increase in demand at some of its stations. The demand increase “may in some instances result in larger queues,” it said earlier.

Separately, at least 50 of BP’s network of U.K. service stations were short of at least one grade of fuel, a company spokesperson confirmed.

No Fuel Shortage, Says Motoring Group (2:47 p.m.)

“There is no shortage of fuel and thousands of forecourts are operating normally with just a few suffering temporary supply chain problems,” said Edmund King, president of British motoring group AA.

“Drivers should not fill up outside their normal routines because, even if the occasional petrol station is temporarily closed, others just down the road will be open,” he added, noting that Fridays and weekends always tend to be busier at service stations.

Britain to Ease Rules for Truck Drivers: FT (2:04 p.m.)

Prime Minister Boris Johnson has given the go-ahead to ministers to relax immigration rules to allow more foreign truck drivers into the country, the Financial Times reports, citing an unidentified person familiar with the matter. Johnson has issued instructions to fix the issue, the person told the FT.

U.K. Retailers Warn of Christmas Disruptions (1:39 p.m.)

The U.K. has a shortage of about 90,000 delivery truck drivers, and unless more are found within 10 days, “it is inevitable that we will see significant disruption in the run up to Christmas,” said Andrew Opie, director of food and sustainability at the British Retail Consortium. That timeframe is important because retailers start to build up on Christmas supplies in October, according to the group.

The BRC, which represents 170 major retailers across multiple sectors, wants the government to create temporary work visas to allow drivers from abroad to fill the gap, Opie said.

Energy Crunch Hits British Vegetables (1:33 p.m.)

The cost of growing young British tomatoes, cucumbers and peppers is surging, in the latest example of how the energy crunch is roiling the country’s food sector.

The vegetables aren’t suited to grow in the U.K. climate, but can flourish in heated greenhouses. While the current season for growing crops like tomatoes is drawing to a close, farmers will soon house seedlings for next year’s harvest, according to Nigel Jenney, head of the Fresh Produce Consortium.

That makes the recent spike in gas costs particularly worrisome, as the glasshouses for young plants must be heated through the winter before the weather warms. The rising energy bills are “a huge additional burden” on growers, and some might cut back or delay plantings, Jenney said.

Miners to See Long-Term Effects of Energy Crisis (1:21 p.m.)

The unprecedented jump in power prices will hit miners for years to come because new long-term contracts will take current levels into account, an executive at Swedish miner Boliden AB said. The company just signed a new 15-year accord to supply a smelter in Norway that’s being upgraded.

“Contracts will have to be renewed sooner or later. However they are written, you will eventually get hurt because of the situation in the market,” Mats Gustavsson, vice president for energy at Boliden, said in an interview. “If you are exposed to the market, the operational expenses have of course increased.”

Some Esso Stations Still Affected (12:34 p.m.)

A small number of Esso-branded pump stations are still impacted in some way by the disruption in U.K. fuel deliveries, a spokesman for Exxon said.

The affected stations are in the Tesco Alliance business of 200 stations, which means there’s a Tesco shop on the site. Exxon arranges supply of fuel to the Tesco Alliance outlets. The U.K. has a further 1,000 Esso-branded sites, but supply to those is arranged by other companies.

Big Queues at Filling Stations (12:25 p.m.)

Fuel is still available -- as long as you’re prepared to wait. By lunchtime in Ashford, Kent, lines had formed outside outside Esso and BP outlets, while a much longer traffic queue had formed outside Tesco Extra on the outskirts of town.

It was a similar picture at West Wickham, South East London, where the line of drivers waiting to fill up at a Shell outlet blocked traffic.

Shell Sees Tight Gas Market Through 2025 (12:02 p.m.)

Shell expects the global natural gas market to remain tight through 2025, according to a note from Jefferies, citing a sell-side event with the company.

According to Shell, the price environment for term contracts is improving and “it is a seller’s market again,” as buyers realize the importance of stable, reliable long-term supply, the note said. Shell has oriented its business to benefit from attractive gas-market fundamentals, but current conditions are more extreme and have developed more quickly than expected.

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