A petrol station in Guernsey is rationing fuel sales after experiencing a surge in demand linked to escalating global oil prices and disruptions to shipping routes in the Middle East. Whiteway Motors, located in Vale, began limiting purchases on Tuesday following an unexpected influx of customers drawn by its comparatively lower prices – 156.5p per litre for unleaded, below the island’s average of 163.5p, according to Guernsey Fuel and Oil Watch.
The increased demand comes as tensions in the region, particularly surrounding Iran, continue to impact energy markets. Iran has effectively restricted passage through the Strait of Hormuz, a critical waterway for global oil supplies, carrying approximately 20% of the world’s oil and liquefied natural gas and around 40% of Europe’s jet fuel, according to reports.
Andre Whiteway, owner of Whiteway Motors, described the situation as “bombarded” with customers. “We’ve got like 13,000 litre capacity of unleaded,” he told the BBC. “Over the weekend, we were busy, ordered the fuel yesterday but they couldn’t get here till this morning so we had to just be fair to others, we rationed it just to make sure everybody had fuel till today.”
Whiteway attributed his ability to maintain lower prices to his supplier not having increased costs “ship to ship.” He explained, “So what they pay for that fuel when it comes in, I get charged that. When the last shipment came in, there wasn’t much increase, so I’ve managed to retain my prices where they are.”
The situation in Guernsey reflects a broader global energy crisis, as highlighted by Fatih Birol, the executive director of the International Energy Agency (IEA). Birol recently stated that the world is facing a more severe energy crisis than those experienced in the 1970s, and even exceeding the impact of the war in Ukraine.
The price increases are not limited to fuel. Island Energy, the Channel Islands’ gas provider, announced a 1.2p per kilowatt-hour increase in gas tariffs, effective April 7th. This translates to an approximate 5% rise in bills for households on standard tariffs, with businesses also facing potential cost increases. The company directly linked the hike to the ongoing conflict in the Middle East and its impact on wholesale gas prices.
Graeme Millar, chief executive officer of the Islands Energy Group, stated that the price increase is a direct result of rising wholesale costs and that Island Energy is not profiting from the adjustment. He added, “Our hedging strategy…has helped to limit the extent of this increase and shield customers from even greater instability.” Millar cautioned that further price increases may be necessary if wholesale prices remain elevated as existing contracts expire, and that reductions are unlikely until wholesale rates fall back to pre-conflict levels.
The situation remains fluid, with the potential for further disruption to global energy supplies dependent on the evolving geopolitical landscape in the Middle East. Island Energy has not indicated a timeline for potential tariff reductions, stating that they will be contingent on sustained decreases in wholesale energy prices.
