Lower speed limits, higher airfares and a surge in summer staycations could all be on the cards if the war in the Gulf drags on, analysts predict.
Petrol rose above 150p a litre for the first time in nearly two years today as the turmoil in Iran feeds through to the high street.
It comes as a war of words escalates between the Government and suppliers, who have been warned against “ripping off” motorists through profiteering.
Asda chairman Allan Leighton denied claims that retailers were benefitting from the crisis.
Asked if his business, the UK’s second largest fuel retailer, was profiteering, he replied: “No, we are not. “Our (profit) margin will be down as a result. It is very clear this is not the case.”
He said the claims had “zero credibility” and told the Telegraph: “The Government strategy is called ‘Point your finger at somebody else’.”
But the row over fuel shows little sign of dying down, with experts warning that the longer the war goes on, the more painful things will get.
Europe may have to follow Asia’s lead and consider some form of rationing, said energy market analyst Neil Crosby, from Sparta Commodities.
Higher airfares and a surge in summer staycations could all be on the cards if the war drags on
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HEATHROW AIRPORTEven in a best-case scenario, with hostilities ending tonight, the world would face months of supply chain difficulties before things get back to normal.
Mr Crosby said that Asian governments had already taken measures to “front-run” the prospect of shortages.
People have been advised to work from home and only drive on certain days and suggested Europe may follow suit.
“The UK hasn’t needed to do this yet,” he said. “But I think Governments in Europe will also be quite keen to front-run the problem. And that means rationing might happen, in some shape or form, before the pumps run dry.
“You could reduce speed limits to reduce fuel consumption, for example.”
Drivers are being warned that petrol and diesel prices will continue to rise in the near future | GETTY/PA
This measure was one of a number of possibilities recommended by the International Energy Agency last week.
Sources stressed this was not UK policy and the Government says that the UK has a “diverse and resilient supply” of energy.
Sparta’s commodities analyst, James Noel-Beswick, said the impact of the crisis was already being keenly felt in the aviation industry.
He predicted rising prices would see many passengers eschew flying. He said Asia was beginning to hoard jet fuel that would usually be flowing west.
Prices would rise to a point where demand would fall, he predicted.
“You’re already seeing that jet prices go so high that it’s destroying demand. People start talking about taking more internal UK holidays,” he said.
“Jet fuel typically flows from Asia to the West.
“You’re starting to see Governments in countries such as South Korea and the Philippines hoarding jet. Whatever they can produce, they are keeping it for their own market.
“We have seen talk about fuel problems in Europe impending. I think that’s something that’s around the corner.
“On jet, we have so little buffer in terms of stock and strategic reserves that we can call upon.”
He said one optimistic view in the industry was that the conflict could be over quickly. But if these voices were wrong, he said, “then we are going to see a real escalation in air ticket prices that again is going to destroy demand”.
Mr Crosby pointed out that even if the vital Strait of Hormuz was opened immediately, there would be a delay before normal conditions returned.
He said: “We would probably be looking at several months before the world can get its oil supply chain back to normal.
“One of the main initial bottlenecks is that you have to get ships back into the region.
“Shipowners have to be confident that their crews are safe. Then they need to sail into the region. Then they need to load and clear the tank tops. Then they need to get to the usual destinations in Asia.”
Asian refineries would take time to run, with a further delay before any product reached Europe.
Sir Keir Starmer is due to chair an emergency Cobra committee on Monday afternoon to discuss the economic impact of the war
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PA
“It’s a complicated supply chain process,” he said.
He added: “Have I seen something on the scale? No, I have not. And probably nobody else has, either. Even if we’re talking about the 1970s and the oil embargos – the size of this problem is double the size of that problem.
“It’s simply unprecedented.”
Asda reported ‘temporary shortages’ at the pumps today. It stressed that elevated demand from customers had led to a small number of local “spikes”.
A Fuel Industry UK spokesman said: “Supply remains stable in the UK and our members are working hard to ensure that remains the case.”
Prime Minister Sir Keir Starmer is due to chair a meeting of the Government’s emergency Cobra committee on Monday afternoon, with discussion focusing on the economic impact of the war.
He said that the meeting would examine “every lever that’s available to Government” to respond to soaring energy prices and the knock-on effect on the cost of living.
Sir Keir said: “I want to make sure that when it comes to the cost of living, we’re doing everything we possibly can at a very difficult period like this.”