Thursday, 12 September 2019

Project Fear, Part the Manieth?

This appeared in Facebook:

On the face of it, it seems logical. Our oil refineries are going to be clobbered on the petrol they export to the EU, at the same time as they are going to be undercut by tariff free foreign imports. This will lead to the closure of oil refineries, strike action, fuel shortages, riots, famine, pestilence and the usual End Of Life As We Know It.

However, no mention is made of the following:

All the crude oil we import is from outside the EU, although just under half is from Norway, which is quasi-EU. Just over half of this at least will become significantly cheaper. (That is assuming that the crude oil from Norway is already significantly cheaper than that from non-EU countries, which is not necessarily the case. Market economics suggest that the Norwegians would charge just slightly less than what we pay for oil from non-EU countries.) This would make it more economical to continue to refine our own fuel rather than to import it ready refined.

We import more petrol than we export and we export more than we consume domestically. (From Google: UK fuel consumption is 1.475 Bn litres a month, which translates to 1.062 M tonnes a month. UK fuel exports are 30 M tonnes a year). So it appears that 100% of those petrol exports that are going to become uncompetitive are actually imported, so the margin on the exported fuel cannot be great or the EU countries that currently import from us could simply buy direct from our suppliers and cut out the middleman.

I may be wrong about this, but this, and, by extension, the entire Yellowhammer report, looks like just another manifestation of Project Fear.


Mark Wadsworth said...

Good spot. Cheaper imports will lead to fuel shortages. Ho hum. I can see a contradiction right there.

Bayard said...

Brexiteers and unions acting together to bring the country to its knees: a very Tory Establishment conspiracy theory.