'Panic buying oil is causing supply crisis'

An oil executive has welcomed a fall in oil prices after "eight days of panic buying" as a result of the war in the Middle East.

Duncan Lambert, managing director of Hull-based Rix Petroleum, said a surge in purchases by those who use oil for their household heating systems had caused a "supply crisis".

Crude almost reached $120 a barrel on Monday over fears the conflict would cause lengthy disruption to energy supplies, but dropped back to about $92 earlier after US President Donald Trump said the war was "very complete, pretty much".

The UK and Ireland Fuel Distribution Association said many households were placing orders because of the war but its advice was to "delay purchasing".

Households use oil to heat their homes and water if their property is not connected to a gas supply. Typically, homes that use oil are in a more rural or isolated location.

More than 40% of homes use heating oil in some rural parts of Lincolnshire, including Wainfleet All Saints, Wragby, Roughton and Ludford, according to Census data.

The figure is more than 20% in some parts of East Yorkshire, including Cherry Burton, Leconfield and Middleton.

Lambert said the company had sold two million litres of oil per day last week - almost three times its average sales of 700,000 litres per day.

However, he said many of the purchases were unnecessary.

"We are arriving at customer homes who have ordered oil for their heating system, and there is not enough space in their tank. Our delivery drivers cannot fit it in," he said.

"I spoke to one customer on the phone who asked my advice on what he should do. I asked him, 'how much have you got left in your tank?' He replied: 'enough to last until August.'

"I have been in the industry 40 years and I have never seen anything like it."

Donald Potter said he got a shock when he ordered oil to heat the bungalow near Grimsby he shares with his wife.

Potter bought oil in January at a price of 60p per litre. Last Monday, he said he ordered a refill and the price had risen to 96.5p per litre.

That resulted in a £200 increase in the usual cost of refilling his tank, he said.

Potter questioned why the price had risen so rapidly, just days after the war began, adding: "Surely, that oil that I ordered must have been in the UK already. Why has it gone up so fast?"

However, Lambert said distributors do not keep a stock of oil and only buy in what they need to fulfil the next day's order.

"We are just milk men. We are wholly dependent on the price and supply that is presented to us. It has been just increase after increase," he explained.

"It normally causes a big shock if the price rises by one pence in a day. On Tuesday, we saw it rise by 28p on that day alone."

Lambert said he felt positive about the most recent price falls.

He said: "My biggest concern is that we might have to ration people. I want people to be sensible so that we don't have to do that.

"This is a very precarious supply chain."

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