Business / Oil crash impact unclear for Sullom Voe
Prices at the pump continue to drop
THE IMPACT of “extraordinary times” in the global fuel industry remains uncertain for Sullom Voe Terminal which takes oil from North Sea and Atlantic wells.
The comment by Shetland Islands Council development committee chairman Alastair Cooper comes as the price of crude oil hit all time lows, with some companies paying up to $30 per barrel just to have buyers take oil off their hands.
The price of petrol and diesel at isles fuel pumps continued its steady descent on Tuesday, but showed no signs of the dramatic crash suffered by the global industry.
Cooper said: “We are in a situation we have never heard of before where people are paying to get rid of their oil.
“That cannot be sustained so my suspicion is that people will be sitting on production from now on.”
He added that the danger of shutting down fields was that the amount of oil that can be squeezed out after production is re-started is seldom as much as when the field was in production before.
The record lows of this week follow a sustained production war between Russia and Saudi Arabia that was compounded by the collapse in global demand caused by the coronavirus pandemic, with the competitors being too slow to brake their production.
The oil surplus has been filling supertankers around the world and US president Donald Trump said that the US would take every drop of cheap oil to build up its strategic reserves.
Cooper said that the situation could play out in “many different scenarios” but he could not see Britain’s North Sea and Atlantic production being turned off completely.
Sound Service Station owner Jordan Thomason said that the price of fuel was £1.05/litre for petrol and £114.09/litre for diesel, but once that fuel was used, the price would be falling again to £1.045 for petrol and £1.12 for diesel.
“It has gone down again today, but not so drastically as I thought it would have. When you consider it was up to about £1.40 a few months ago, it shows what’s going on globally.”
One of the Bixter Shop owners, Steven Johnson, said that they were charging £1.15 for petrol and £1.15 for diesel and the price had come down steadily by around 30p over the last month or so.
He said that he had been told fuel sellers could expect a delay in claiming back the 5p/litre discount granted to isles suppliers in 2012 because the inland revenue was snowed under with other claims at the moment.
Johnson said that the fuel price at the pumps was close to a historic low in recent years, though petrol had dipped to nearly £1/litre a few years ago before climbing back up.
Shetland News attempted to contact Certas Energy, the owner of wholesalers Scottish Fuels and Leasks Filling Station, for price information, but without success.
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