The government has dismissed fears of diesel rationing after some of the world’s biggest commodities traders suggested that Europe could face a supply shortage.
Vitol yesterday warned of a “systemic shortfall of diesel” and said that rationing of the fuel was a “possibility” because of disruption to supplies from Russia.
Russia is the world’s biggest exporter of oil and oil products, exporting about five million barrels a day of crude and three million of fuels such as diesel.
The International Energy Agency has said that Russian crude exports could drop by 1.5 million barrels a day from next month while fuel and other product exports could fall by one million barrels a day, due to a combination of formal sanctions from America and a much wider boycott of Russian energy by western companies.
About 18 per cent of the UK’s diesel, or a third of its diesel imports, come from Russia. Britain has vowed to end the purchase of Russian oil and oil products by the end of this year.
Diesel prices have already hit record highs of almost 179p a litre as fears of a shortage push up oil and fuel prices.
“The thing that everybody’s concerned about will be diesel supplies,” Russell Hardy, chief executive of the commodities giant, told a Financial Times event. “Diesel supplies in Europe are most concerning, as half the imports come from Russia . . . rationing of diesel is a possibility.”
Jeremy Weir, chief executive of Trafigura, told the event that the diesel market was “extremely tight” and “going to get tighter”, while Torbjorn Tornqvist, co-founder of Gunvor, said: “Diesel is not just a European problem, this is a global problem. It really is.”
A government spokesman said last night: “It is entirely untrue to suggest we have any intention to ration diesel. Our phase-out of Russian oil over the course of this year is designed to give supply chains more than enough time to adjust.”
However, Vitol is not the only company to warn of the potential for rationing as sanctions and boycotts of Russian supplies lead to a global shortfall and competition for supplies from elsewhere.
Amrita Sen, director of research at Energy Aspects, the consultancy, told MPs last month that Germany could face rationing as soon as the end of this month, with BP and Shell already reducing sales of diesel to wholesale customers. She suggested that the UK could also face rationing as refineries may not be able to afford supplies and may have to reduce their output.
The UK government has said it will work with companies via a new Taskforce on Oil to support them in finding alternative supplies.
The UK Petroleum Industry Association has previously said: “Fuel suppliers are working with the government to deliver the fuels the UK needs while adjusting long-term supply routes to reduce reliance on Russian crude oil and oil products.
“Global markets have historically been able to adjust to ensure secure supplies and we expect this to be the case again.”
Hardy also warned yesterday that “the longer the war goes on, the greater the chance of an economic recession”.
The traders also warned over disruption in gas markets as companies struggle to meet margin calls.
Hardy said: “Gas markets are even more concerning than oil. It’s important for regulators to have the tools in their back pocket in case there is disorder in the gas market.”
The European Federation of Energy Traders warned last week that several “generally sound . . . energy companies” were at risk of being unable to meet huge margin calls triggered by the extreme market conditions, and urged central banks or governments to provide “time-limited emergency liquidity support to ensure that wholesale energy markets continue to function”.