Development in Oil and Gas Retail Industries

This presentation discusses the development and challenges in the oil and gas retail industry in the UK. It focuses on the closure of petrol stations and cutbacks in storage capacity, which have made the country more vulnerable to disruption in oil supply. The presentation also explores future development plans and strategies for the industry.

Development in Oil and Gas
Retail Industries

INTRODUCTION
 In the present scenario, oil and gas industry of UK is playing very important role in
enhancing the life of people. Further, it can be stated that the industry is offering
various products such as fuel for transportation of people and goods along with
energy to different power industry
 Other than this, oil and gas industry of UK is also contributing a lot in development
of country's economy by providing employment to thousands of individuals.
However, it can be argued that in recent years, the industry has started facing
various issues and challenges.
 This presentation explains how closure of petrol stations and cutbacks have made
Britain more vulnerable to disruption in oil supply.

UK OIL AND GAS
INDUSTRY

PETROL STATIONS CLOSURES AND CUTBACKS IN
STORAGE CAPACITY
 In last few years, there has been rapid increase in the rate of petrol stations closure in the
country. One of the main reasons behind this is that independent players in industry are
not able to compete with supermarkets and other major players in the industry.
 Today, there are only 8600 forecourts left in the country which is very low as compared
to 37500 forecourts in the year 1970. Petrol stations closures and cutbacks in storage
capacity has emerged as one of the most important issues in front of the entire nation.
 Another reason behind this is that the major player have started fixing prices in petrol
pumps. The government official and other regulatory bodies are trying it really hard to
ensure that the country has secured supply in terms of fuel. In last one decade 29% of
total petrol stations has been closed.

Contd...
 The problem which UK is facing is that number of cars is increasing at very good
pace but there are not enough stations to supply fuel to these cars. Furthermore, it
can be stated that small petrol stations are the one which are affected by all these
issues to a great extent.
 Another interesting fact is that nowadays 14% of the total number of petrol station
in the country are owned by supermarkets of the country such as Morrisions, Tesco,
Sainsbury, Asda etc.

Decline in petrol stations

Contd....
 Along with this, they are contributing more than 40% of the total sales of petrol in
the country and they are giving tough competition to other market players in the
industry. Most of the companies in the industry have lost their total share as
recently Tesco has overtaken BP and has become the largest retail of oil and petrol
in UK.
 It can also be stated that the cut backs in storage capacity and closure of stations has
made the country very vulnerable in terms of oil supply. As compared to other
countries, the storage capacity of the country has always been very less.
Furthermore, due to less storage capacity, it is facing some difficulties in supplying
the required amount of oil and gas. There are various petrol stations in the country
which are running out of their fuel.

Contd...
 On the other side of this, there are some organizations which has started to focus on
upstream production of oil and gas. The example of this is that Total Oil and gas
company of UK who sold its shares to Shell and disposed its network of petrol
filling stations to Rontec.
 The entry and current dominance of supermarket stores in the industry can be
considered as the main reason behind the above stated action of Total Oil and gas
company. Other than this, increasing number of petrol stations is another major
reason why the country's storage capacity is declining.

Contd...
 The entire fuel network supply in UK is affected by all these disruptions in oil and
gas industry. Furthermore, government authorities has suggested drives to fill up
their tanks and store extra fuel so that they do not find any kind difficult. In addition
to this, long que and declining in supplying are some other consequences of Petrol
stations closures and cutbacks in storage capacity.

Future development a of UK oil and gas retail industry
 UK is looking forward for growth and expansion of its entire oil and gas industry.
Along with this, it also trying very hard to develop effective strategies through
which it can overcome the issue related to closure of petrol stations. UK oil and gas
retail industry is seeking for maximizing its economic production of all its gas and
oil resources which are lying offshore.
 In addition to this, the industry is also looking forward for growth and promotion
of its supply chain at international as well as domestic level. Effective plans and
strategies are developed to provide right direction to the government and entire
industry for its future development. Other side of this, the country will also be
focusing on mapping its entire supply chain in oil and gas industry.

Contd...
 This will support in identifying strengths of the industry along with its major
weaknesses. In terms of future development, the use of advanced and upgraded
technology will also increase in the entire oil and gas industry.
 Technological tools such as increased oil recovery and enhanced oil recovery
technique will result in enhancing the overall production and operation capacity of
industry. In addition to this, it will also focus on seeking for effective storage
opportunities in future along with the use of carbon capture for the same.

Contd...
 It can be stated that at present UK oil and gas retail industry is only emphasizing on
lowering down its overall cost of operations and administration which is not
effective in terms of long run. Thus, it can be argued that there will be a significant
positive impact on overall output and production of oil and gas industry if the
government and industry becomes successful in making maximum use of all its
domestic opportunities.
 Along with this, the industry will also be required to focus on overcoming issues
and threats which it is currently facing. All these things will support in growth and
development of UK oil and gas retail industry and its entire economy.

REFERENCES
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Jones, P., Hillier, D. and Comfort, D., 2015. The contested future of fracking for shale gas in the UK:
risk, reputation and regulation. World Review of Entrepreneurship, Management and
Sustainable Development. 11(4). pp.377-390.
Valadkhani, A., Smyth, R. and Vahid, F., 2015. Asymmetric pricing of diesel at its source. Energy
Economics. 52. pp.183-194.
Closure of petrol stations. 2016. [Online]. Available through:
<http://www.dailymail.co.uk/news/article-2264588/75-petrol-stations-40-years-forcing-drivers-
travel-pay-tanks.html>. [Accessed on 21st March 2016].
Uk oil and Gas. 2013. [Online]. Available through:
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/175480/bis-13-
748-uk-oil-and-gas-industrial-strategy.pdf>. [Accessed on 7th April 2016].

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