PRA outlines ‘silver bullet’ initiatives to Government
The Petrol Retailers Association (PRA) has recently outlined initiatives to the Minister for Energy & Business, Michael Fallon, that will improve fuel supply resilience and encourage investment in petrol forecourts at zero cost to the Treasury. More than 5000 sites (62 per cent of UK total) are still owned by independent businesses but numbers have been declining for many years.
Brian Madderson, Chairman of the Petrol Retailers Association commented, “With 6,000 fewer forecourts than at the time of the September 2000 fuel crisis, and all independents working to minimum stock levels, the UK’s ability to weather supply disruptions has become dangerously eroded. Memories of the fuel stock-outs at petrol stations as recently as March 2012 remain vivid and analysts suggest that recent events at Grangemouth may just be the foretaste for dramatic industry changes ahead”.
A tanker load of petrol today costs the independent retailer over £50,000, with Government tax (duty + vat) being £30,000 and payable to the supplier virtually on delivery. There are no small or medium enterprises that have to pay so much tax before collecting the income from their customers.
With such burdensome cash flow constraints, it is essential that Government enables retailers to utilise the existing EPSS scheme for duty deferment relating to fuel supplies. Regularising this scheme for forecourts would incentivise these hard pressed retail businesses to hold higher fuel stocks and release funds/assets currently held as fuel payment security for investment purposes.
Madderson summarised at the PRA’s recent Regeneration Forum, “We are alerting Government to a real silver bullet that will both stimulate investment to provide more jobs and better facilities for motorists, especially in rural areas. We need the Government’s full support and support from the oil companies to make this happen quickly and effectively.”