Fuel Update - March 2020

Slowed supply chains; deliveries at 10 days

Fuel supply markets have suffered several disruptions in the past days:

  • Demand has boomed as spring planting starts, and both domestic and commercial buyers look for bargains with current low prices (driven in turn by the price war between Saudi Arabia and Russia). This has put suppliers overcapacity in many parts of the country.
  • To compound the issue, supply has been constrained this week by technical issues at the Immingham terminal. 
  • We also have the lasting effects of the flooding from the previous storms, which is now being felt to a greater degree due to the impact they had on freight movement. This is now evident with the new increase in demand. 

These factors are ultimately impacting the ease of moving fuel around the country.

The complication at this time comes from the latest guidance on COVID-19. While there is limited impact as yet, suppliers and depot managers are concerned by any potential enforced staff absence, and the impact this would have on distribution and working through the backlog. 

The suppliers are working hard to return to normal capacity however with the uncertainly of COVID-19, they are requesting as much flexibility as possible with your date of delivery going forward. 

At this stage we expect fuel infrastructure to be supported as a critical part of the UK economy, and plenty of bulk supply sits waiting for entry to the UK.

However: there is clearly a general delay in fuel supply. 

Delivery has moved to ~10 days from request, and some suppliers are struggling to get any fuel out.

We recommend farms keep an eye on stocks, keeping at least 10 days in the tank through this busy time.

Prices may be rising as a result – though, with the recent oil price fall, it should still be well within affordability for farm budgets.

Aggressive stockpiling will compound the current situation so we advise you to remain proportional in your actions.

We recommend you keep all supplier avenues open throughout this time and the team at Yagro is doing all they can to ensure our users get the fuel they need.

Please don’t hesitate to contact us directly if you would like more market information, or would like to understand the options on Forward Buying of fuel to take advantage of the current market situation.

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