Independent petrol retailers in cash crisis as oil prices surge back to over $30/barrel

“The news of major oil producers planning to cut their output will quickly impact UK wholesale costs, and independent forecourt operators will struggle with the surge in cost,” said Brian Madderson, Chairman of the Petrol Retailers Association (PRA).

Madderson has explained in a letter to the Chancellor this week that the generous £25,000 cash grant to small and medium size retailers will help many businesses, but not fuel retailers.* The Government tax, fuel duty and VAT to be paid on a tanker load of fuel is over £26,000, meaning the COVID-19 grant does not cover the tax charges on a single delivery – nearly 70% of the pump price is just Government tax.

Members of the PRA, especially those in rural areas of the UK with modest fuel volumes even outside the pandemic, are worried that with reductions of up to 80%, they are struggling to keep open. The majority of customers still using their facilities are critical workers so they have a duty to try and remain operational, but there is concern as to whether they will be able to re-open in the aftermath of coronavirus.

Madderson continued, “Without immediate cash flow assistance, many more forecourts across the UK will have to close. This week, the PRA has made available a technical fact sheet advising members how to safely and effectively shut down operations.

“We have proposed a way to the Chancellor which could provide an immediate 3 months emergency credit line to the fuel dealer sector and we now wait for his response.”

* Click here to read the PRA letter to the Chancellor from 2 April.