By: Tamir Helmy
Long lines at gas stations have become a regular sight across Great Britain. Panic about a lack of available gas led to an increase in demand at a time when supply was low, causing shortages and surging prices.[i] Shortages and supply chain delays have impacted countries around the world leading to rising prices, but Britain has been hit harder than most.[ii]Naturally, this has led to the question of just who or what is to blame for this?
Prime Minister Boris Johnson said that the economy is facing the stresses and strains of a post-COVID recovery.[iii] By contrast the leader of the opposition, Keir Starmer, cited the problems are being caused by a total lack of planning by the government over the worker shortages Brexit has caused.[iv] Both are partially right as COVID-19 has caused shortages and price surges of various commodities around the world and worker shortages undoubtedly are playing a major role. However, Britain was already more susceptible to shortages than its neighbors due to years of government policies reliant on continuously importing oil and low storage capacities.[v] The UK has some of the lowest gas storage capacities in Europe with far less storage capacities than other large Western European countries such as Italy, Germany, France, the Netherlands, and Spain. France has the most storage capacity of those countries and has eighteen times the storage of Great Britain. Spain, which has the least, still has three times the amount of storage that the UK has.[vi] The UK’s storage capacity has decreased in recent years due to policies such as the closing of the Rough storage facility which was responsible for 70% of the UK gas storage capacity before the government decided to stop subsidizing to keep the site going in 2017.[vii] Since then, some including National Grid, which operates Britain’s gas and electricity supply, have warned the UK will not have enough gas stored to meet demands.[viii]
Fuel drivers are needed to deliver fuel across the country to deal with the shortages. Much of Europe is dealing with a driver shortage but this is hitting Britain the hardest because the number of drivers in the UK is dropping by over a third since the start of the pandemic due to tougher visa regulations and many drivers simply leaving Britain and not coming back.[ix] The government has tried to address this by increasing short-term visas for truck drivers.[x] However, that appears fruitless because barely any EU drivers have applied for visas.[xi] With few European drivers appearing on the horizon Prime Minister Johnson has called in the army to drive tankers to deliver gas throughout the country.[xii]
The combination of lack of storage and lack of drivers has made it easy for Britain to experience shortages and rising prices while its neighbors are facing less severe problems.[xiii] Both the shortage of drivers and storage are self-inflicted wounds. Figures in the Conservative government have spent years railing against foreign workers and even now Johnson has said the solution is more British workers.[xiv] Trying to entice foreign drivers to come back to the UK would be a major U-turn for the government and would show the major downsides Brexit has brought to an isolated Britain.[xv] Similarly, the lack of gas capacity is the result of the government trying to reduce expenditures at the cost of having a reduced ability to handle upticks in demand.[xvi] Despite what Prime Minister Johnson may say about this being the result of COVID-19 supply shocks, Britain is really being hit hard in the area of gas storage and Brexit due to years of government policies and rhetoric. When supply systems started getting disrupted, they created a self-inflicted perfect storm.
[i] David Shepard, Boris Johnson prepares to call in army as panic buying drains UK petrol pumps, Fin. Times (Sept. 27, 2021), https://www.ft.com/content/7e79e4a8-7a1e-4b2c-8f81-cbf4e9969e28 [https://perma.cc/3EL9-NUVD].
[ii]Natural gas prices are spiking around the world, The Economist (Sept. 25, 2021) https://www.economist.com/finance-and-economics/natural-gas-prices-are-spiking-around-the-world/21804953 [https://perma.cc/TR3F-4WHP].
[iii] Laura Kuenssberg, Boris Johnson: I’m not worried over jobs gap and rising prices, BBC News (Oct. 5, 2021), https://www.bbc.com/news/uk-politics-58800329?xtor=AL-72-%5Bpartner%5D-%5Bbbc.news.twitter%5D-%5Bheadline%5D-%5Bnews%5D-%5Bbizdev%5D-%5Bisapi%5D&at_custom1=%5Bpost+type%5D&at_custom4=twitter&at_medium=custom7&at_custom3=%40BBCPolitics&at_custom2=twitter&at_campaign=64[https://perma.cc/W8FG-E7HY].
[iv]Ashley Cowburn & Andrew Woodcock, Keir Starmer accuses ministers of ‘total lack of planning’ over worker shortages, The Independent (Sept. 26, 2021), https://www.independent.co.uk/news/uk/politics/keir-starmer-fuel-hgv-grant-shapps-b1927177.html [https://perma.cc/H3YY-RD4Y].
[v]Dharshini David, Where does the UK get its gas and is it facing a shortage this winter?, BBC News (Sept. 21, 2021), https://www.bbc.com/news/business-58637094 [https://perma.cc/AR2A-TUUB].
[vi] Id.
[vii]Jillian Ambrose, ‘Relying on luck’: why does the UK have such limited gas storage? The Guardian (Sept. 24, 2021), https://www.theguardian.com/business/2021/sep/24/how-uk-energy-policies-have-left-britain-exposed-to-winter-gas-price-hikes [https://perma.cc/3DDV-QTGG].
[viii]Adam Vaughan, UK running out of gas, warns National Grid, The Guardian (Mar. 1, 2018), https://www.theguardian.com/business/2018/mar/01/uk-is-running-out-of-gas-national-grid-warns-freezing-weather [https://perma.cc/6RWN-LYX5].
[ix] Joe Mayes et al., Why Brexit Britain Is Isolated, Vulnerable and Running on Fumes, Bloomberg (Oct. 4, 2021), https://www.bloomberg.com/news/articles/2021-10-04/why-brexit-britain-is-isolated-vulnerable-and-running-on-fumes[https://perma.cc/PSZ6-CZ7S].
[x] Holly Ellyatt, At the U.K. battles food, fuel and labor crises, Boris Johnson promises change, CNBC (Oct. 6, 2021), https://www.cnbc.com/2021/10/06/boris-johnson-promises-change-as-uk-faces-food-fuel-shortages.html [https://perma.cc/CGY9-E3EL].
[xi]Conrad Duncan, Fuel Crisis: Emergency visa scheme attracts just 27 tanker drivers from EU, report says, The Independent (October 4, 2021), https://www.independent.co.uk/news/uk/home-news/fuel-crisis-eu-drivers-visa-b1932336.html [https://perma.cc/UT2K-GYLK].
[xii]Frank Langfitt, The British Government Prepares To Use Army Truck Drivers To Help With Gas Crisis, NPR (Sept. 28, 2021), https://www.npr.org/2021/09/28/1041154775/british-uk-petrol-fuel-gas-shortage-army.[https://perma.cc/8YW7-CWFY].
[xiii]Ambrose, supra note vii.
[xiv] Ellyatt, supra note x.
[xv] Mayes et al., supra note ix.
[xvi] Ambrose, supra note vii.