RUNNING LOW
Prospects for petrol station owners are looking bleak
WHEN even the boss of Shell says his next purchase will be an electric car, one could be forgiven for thinking the game is up for petrol stations.
There used to be a petrol station in every neighbourhood. But the supermarkets’ move into selling fuel saw to that. Now the Government’s announcement that it will end the sale of all new petrol and diesel cars and small vans by 2040 has cast an even longer shadow.
Shell boss Ben van Beurden’s comment last week that ‘the next buy I do is my next car, which will be an electric vehicle’ seemed the final nail in the coffin.
The number of petrol retailers in the UK has fallen from nearly 14,000 in 2000 to 8,500 today, and supermarkets now dominate the market, using their bulk to win top deals from wholesalers, allowing them to sell fuel cheaper than rivals.
Tesco alone sells more than 15 per cent of all the fuel used in the UK – that is more than either BP, Shell or Esso – with Sainsbury’s at 10 per cent, Morrison’s at 9 per cent and Asda at 7 per cent.
But there are still nearly 6,000 independent petrol retailers in the UK, and with electric cars accounting for less than 1 per cent of new car sales the industry can claim considerable success in the way it has adapted to a changing market.
Brian Madderson is chairman of the Petrol Retailers Association. He said: ‘We are in a better situation than we were five to ten years ago because so many independent petrol retailers’ forecourts have a convenience store on them.
‘Over 50 per cent now have a Londis, or Spar, or a Sainsbury’s Local, or Morrisons Daily.’
Madderson also pointed to the things that the Government did not say in its announcement last week. It did not impose a blanket ban on diesel vehicles across cities and towns. It did not introduce an ‘unattractive’ diesel scrappage scheme. It did not allow ‘unfair’ penalties to be imposed on diesel drivers by local authorities.
And the proposed ban in 2040 does not apply to large vans, HGVs, motorbikes, tractors and other offroad equipment.
Madderson said: ‘At the moment there are 90,000 electric cars on the road and 34million fossil fuel cars.
‘And hybrid cars, which are likely to be key in the future, need petrol, too. The Government’s announcement is a wishlist, it is not a series of regulations.’
Meanwhile, what happens to tax receipts? Madderson said: ‘The Treasury stands to lose up to £20 billion of fuel duty and VAT every year if retail sales of petrol and diesel evaporate. What are its plans for replacing this significant contributor to the national budget? Are electric vehicles suddenly going to bear the brunt of the shortfall?’
Certainly the price of lithium, a key ingredient in batteries, has soared this year, as has the value of firms mining the silvery-white metal, and producing batteries. Some even dub lithium as ‘white petroleum’.
Electric cars need charging, of course, and there are more than 4,500 locations with charging points in the UK. But these can take up to eight hours. Petrol stations need the fast charging points that can charge a car in 20 to 30 minutes.
But Madderson said: ‘The power needed is more than the total power required to run a large forecourt, car wash and on-site shop. We have suppliers telling us it is going to cost £80,000 to build a sub-station to do it. Not many independent petrol retailers have that sort of money.’
He said some charging firms had approached retailers and offered to pay installation costs, but in return are demanding two parking spaces be leased to them for 30 years.
Retailers are wary of tying up space used by customers to park when they shop, and which could be used for future development.
But when even Shell invests £1 billion a year on renewable energy, petrol station owners know they have to change.