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The UK government has temporarily suspended the Competition Act of 1998 to allow oil companies to help each other stock up on gasoline and diesel amid panic buying that started last week that has left 90% of fuel pumps dry in some of Britain's largest cities.
The panic buying began last week when the news emerged that BP was going to close several gas stations. The reason for the closure had nothing to do with the availability of fuels. Instead, it was caused by a shortage of tanker truck drivers. Nevertheless, the shortage sparked immediate panic among Britons, who formed huge lines to stock up on whatever was available. Ironically, the long lines at gas stations prompted warnings of a fuel shortage because as panic buyers drained stations, there were not enough tanker truck drivers to refill them.
In this context, the suspension of the competition law will, according to British media, allow oil companies to share information and strategize about delivering fuels to those parts of the country that are most in need of them.
"We have long-standing contingency plans in place to work with industry so that fuel supplies can be maintained and deliveries can still be made in the event of a serious disruption," said business secretary Kwasi Kwarteng, as quoted by the Press and Journal.
"While there has always been and continues to be plenty of fuel at refineries and terminals, we are aware that there have been some issues with supply chains," he also said, as quoted by the BBC. "This is why we will enact the Downstream Oil Protocol to ensure industry can share vital information and work together more effectively to ensure disruption is minimised."
Sky News, meanwhile, cited the chairman of the Petrol Retailers Association, who said things were going to get worse before they got better. Describing the current situation as "catastrophic," Brian Madderson said, "There's enough fuel at the refineries and terminals to supply the normal demand. What we have at the moment is abnormal demand where everyone is rushing to fill up their vehicles."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.