Fleet News

Fuel deserts become real risk

Parts of the country are at real risk of becoming fuel deserts with nowhere for motorists to fill their cars after it emerged that the number of filling stations has fallen to the lowest level since 1913.

There were roughly 10,100 places for motorists to fuel their vehicles in 1913, today there are just 9,400 stations serving a British parc of over 33 million vehicles – almost 31 million of which are cars.

Due to tiny margins, fierce competition and high overheads, petrol retailing is unattractive.

According to the Petrol Retailers’ Association (PRA), an efficient fuel retailing business will gross just 2% per annum on investment.

Such poor returns have resulted in just over 20 new forecourts opening in the last five years, the majority of which were attached to supermarkets.

Forecourt closures continue at about 450 every year.

If these rates of decline continue, it will take just four years for the number of filling stations to drop below the critical 7,500 number needed to keep the country moving.

But motorists in many rural areas of the country are already finding it difficult to find anywhere to fill their vehicles.

The AA said: “We know there are some areas of the UK where supply no longer exists at a local level meaning there's a real risk of some drivers running out of fuel.”

Margins are so thin that forecourts use fuel simply to attract customers into their convenience stores.

Indeed, 86% of filling stations now have a convenience store, which acts as their main profit driver.

However, this has not been enough to stem the tide of closures.

“Fuel retailers work under great financial pressure in order to provide a vital service,” said Ray Holloway, PRA director, following a meeting with a cross-party group of MPs to discuss what can be done to help secure the future of the forecourt sector.

“Many fuel retailers are barely clearing costs. There are now less than 9,500 forecourts in the UK, including supermarket filling stations,” he said.

“The situation could become critical if the total number of forecourts continues to drop at the rate of recent years.”

Highlighting the problem in the South West, the Highways Agency has launched a campaign to try to reduce the number of motorists breaking down in the area because they run out of fuel.

Highways Agency officers will be at motorway service areas during this week to show drivers where they can top up.

The campaign coincides with the news that more than half of motorists believe there is a shortage of fuel filling stations across Britain.

“On the one hand, fuel price competition is good for motorists but if it’s driving smaller independent filling stations out of business in some areas, more and more people are going to be forced to buy fuel from the supermarkets who may then feel able to push prices up,” said David Shelton, managing director of Motorpoint, which carried out the survey.

The PRA believes that Government intervention is critical such as extending business rate relief to forecourts in urban locations.
 

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