Drivers' panic fuels shortages at petrol pumps

Fuel crisis as drivers stock up ahead of protests

Petrol pumps across the country ran dry last night after drivers fearful of a new fuel crisis queued at garages from dawn to dusk in a mass outbreak of panic buying.

Hours before this morning's planned protests outside oil refineries, petrol station owners reported "hectic" business as cars crammed on to forecourts and snaked round surrounding roads. As garages ran dry after experiencing three times normal business, queuing drivers yelled abuse at forecourt staff. Some petrol stations rationed customers and one retailer was accused of profiteering by raising prices.

The panic buying was sparked by weekend media reports of a looming crisis at the pumps caused by the Fuel Lobby's threats of protests at oil refining plants today. Despite appeals for calm from both the Government and the oil companies, the public's rush to avoid shortages caused the self-fulfilling prophecy that the authorities had sought to avoid.

Ministers were standing firm against the protesters yesterday - despite a threat of a rerun of the blockade which brought the country to its knees in 2000 - and rejected demands for a cut in duty.

The price of fuel has soared in the past fortnight after Hurricane Katrina knocked out more than half of oil production in the Gulf of Mexico. In some places a litre of petrol has passed the £1 mark for the first time, pushing inflation to 2.4 per cent on the consumer price index, the highest level since its inception eight years ago.

At the TUC conference in Brighton Gordon Brown said the Government understood the problems faced by hauliers, farmers and motorists, but refused to bow to the Fuel Lobby's demands for a cut in fuel duty of up to 10 per cent. Instead he called on oil producing countries to raise output.

The Fuel Lobby urged members of the public to gather outside oil refineries from 6am. Details of the protest locations have been kept secret amid claims of heavy-handed tactics by the state. Unconfirmed reports suggested that the Shell refinery at Jarrow, south Tyneside, and BP refineries in Coryton, Essex and Grangemouth in Scotland would be targeted. French lorry drivers were said by one protest organiser to be preparing to seal off the port of Calais.

Ministers have warned privately that they will not tolerate widespread disruption of the fuel supply network and say the Army will remove protesting juggernauts and that petrol rationing may be introduced.

Ray Holloway, director of the Petrol Retailers Association, which represents the 7,000 independent petrol stations in the UK, said the panic buying yesterday had been worse in towns and cities than in the countryside. "The problem has been on the edge of urban [areas]. Some of the queueshave been quite horrendous." He said "a high number" of petrol stations had or were about to run out of fuel.

The big oil companies sought to reassure customers, saying that fuel supplies were operating normally. A spokeswoman for BP, which runs 1,300 stations insisted: "There's plenty of diesel and petrol out there."

But there were scenes of anger and confusion across Britain. On Merseyside, police reported that drivers were dialling 999 to find out where to buy fuel, causing their phone system to crash. In Cornwall, motorists threatened staff at a petrol station in Redruth after it refused to sell petrol to non-regular customers. Drivers in Bristol reported hour-long queues. Aston Way service station in central Birmingham ran out of unleaded fuel after selling 60,000 litres in 24 hours. "No fuel" notices were being displayed at two petrol stations in Northampton. The owner said: "Some people are understanding but some are aggressive. They were blaming the staff and saying that they were trying to ration people but we weren't - we were completely dry." Customers were rationed at Burbage Road service station in Hinckley, Leicestershire The owner said: "We are the only garage in the area with any fuel. We are limiting people to £25 worth so most people can have it."

The Fuel Lobby claimed its planned protest had struck a chord with voters. The organisation has four demands: a 10 per cent tax rebate for essential fuel users; a 5 per cent reduction in fuel duty for the public; stable fuel prices for six monthly periods (achieved by changing duty in line with fluctuations in the changing oil price); and a new system for showing the level of tax on fuel receipts.

Andrew Spence, a Fuel Lobby leader, was caught out by the shortages and was forced to wait for half an hour for petrol at a filling station near his farm in Consett, County Durham.

He said: "I knocked on cars and asked people why they were queuing and a lot of people denied they were panic buying. But a lot of people said they were doing it because the Government said it was going to ration petrol. And that's what happens when you say you are going to ration something."

He said there would be no blockades today because using lorries to shut refineries would be "too intimidating". But he called for a show of strength from the public. "If only one person turns up tomorrow for what we have achieved this last 48 hours I am more than pleased because we have given this Government the biggest bloody nose since the last protest," he said. "We could pack up and go home now - we have done our job very well."

Green groups urged the Government to maintain levels of duty. "Fuel tax is an important weapon in the fight against climate change," said a spokesman for Greenpeace.

Price check

Litre price/VAT and duty

Holland 98p/61.7%

UK 95.5p/61.1%

Germany 88.9p/57.8%

Finland 89.2p/57.1%

Belgium 87.2p/55.8%

Denmark 88.4p/54.8%

Sweden 86.6p/54.5%

France 83.6p/54.3%

Italy 86.2p/53.4%

Portugal 83.6p/51%

Hungary 78.3p/46.2%

Ireland 72.9p/43%

So what's to blame? War, surging demand and a hurricane

Hauliers are revolting, drivers are queuing to buy petrol, and the media is full of scare stories about a petrol shortage. Where has this crisis come from?

Q: What has happened to petrol prices?

A: The price of petrol has surged by more than 10p a litre in 12 weeks. In June, it was below 85p a litre on average and it is now nudging 96p - a 13 per cent rise. Diesel has gone above 98p, and could hit £1 a litre on current trends.

Q: What is behind the rise?

A: Oil prices - which are fundamental to petrol prices - have been rising for several years, driven by the increased tensions in the Middle East since 9/11 and the Iraq war, rising demand from the booming economies of China and India, and controls on the output from the powerful oil cartel Opec. On top of that has come Hurricane Katrina, which laid waste torefining facilities along America's Gulf coast and in the Gulf of Mexico.

Q: So does that feed straight through to petrol prices?

A: The picture is confused by tax. In the US, where tax is a tenth of the price, fuel costs have rocketed from $1.50 to as much as $3 a gallon. That compares with $7 in the UK where tax is two-thirds of the price.

Q: But if that's the case then surely the rise must be less dramatic?

A: Yes that is true - just a third of the fuel price is linked to oil prices. The problem is the size of the tax-take means prices are already at levels that hurt families and businesses. Crucially, they are above the levels in 2000 that sparked the protests by road hauliers that brought the country to a halt.

Q: That all led to a government U-turn over its "green" policies for ratcheting up fuel duties. Is that going to happen this time?

A: In 2000, the Government abandoned the fuel duty escalator and froze fuel duties for two years. Gordon Brown has already announced that an increase planned for 1 September would be delayed, and is likely to use the autumn's pre-Budget report to extend the freeze.

Q: So what is the Chancellor's answer?

A: He has put the blame on Opec, saying they have not published enough information on their reserves, and urged them to use their meeting on Monday to raise output.

Q: Is this likely to satisfy the protesters?

A: Certainly not. They are planning blockades and drive-slow protests to start this morning. It is unlikely that political grandstanding by the Chancellor will weaken their resolve.

Q: So is it the same coalition of hauliers and farmers that made all the noise in 2000?

A: Yes but some independent groups sympathise with their aims - if not the means. The Institute of Directors has called for an immediate cut in fuel duty while the RAC Foundation has suggested a variable rate that rises when crude prices are low but falls when there is a price spike.

Q: Is this just a British problem?

A: No, fuel taxes are high across the European Union. But the reaction of some governments has been more sympathetic. France handed out cash to farmers and plans to cut fuel tax for taxi drivers, lorry drivers and fishermen.

Philip Thornton