29th April 2008
For Immediate Publication
Impact of high crude oil prices and UK refining capacity
Responding to media comments about the impact of high crude oil prices on fuel costs and the suggested link to a lack of UK refining capacity, Nick Vandervell of the UK Petroleum Industry Association commented:
He continued: "UK demand for road fuels over the last 10 years has grown by only 3% in volume terms which has been met by UK refineries. Within the context of a closely integrated refined product market in NW Europe, UK refining capacity is not an influence upon pump prices."
He concluded "Oil companies with upstream oil and gas exploration and production generate most of their earnings from those activities rather than refining.In any event results should be viewed in the context of the scale of the challenge in meeting forecast fuel demand over the next 30 years, which the International Energy Agency estimated would require investment of $3trillion in oil and gas exploration, and refining. In the UK, substantial refinery investment will continue to be required to meet ever tighter emission standards and to enable refineries to process a wider range of crude oils. We very much hope that the right conditions are maintained in the UK to attract this investment in what is a highly competitive international market."
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Nick Vandervell +44 (0)20 7269 7604
Notes to editors:
- UKPIA represents the oil refining and marketing companies operating in the UK, which also own approximately 2,152 of the UK's 9,271 service stations.
- UKPIA members own and operate the nine crude processing oil refineries in the UK.
- UKPIA's report "Meeting our energy needs:The Future of UK Oil Refining" outlines many of the key challenges and can be viewed at www.ukpia.com/publications