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This publication sets out the conclusions to DECC’s review of the refining and fuel import sectors in the UK.
As we progress toward a low carbon economy in the UK, oil products will continue to be crucial to the economy and consumers. Oil demand will reduce in the coming decades, but by 2030 the UK is still expected to consume some 50 million tonnes of oil products per year, compared with 61 million tonnes today.
The review concludes that resilience and security of supply is supported by retaining a mix of domestic refining and imported product. This is consistent with the government’s energy security of supply strategy which recognises the benefits of supply diversity.
Global commercial factors will continue to affect the refining market in the UK and the EU more broadly, and further closures across the continent are likely in future. Ultimately, while market forces will decide what supply configuration and balance prevails in the longer-term, a package of actions have been developed by government which taken together could help improve the operating environment for the refining and import sectors. These actions have been developed across three themes; a partnership approach with industry, removing market distortions and tackling regulatory burden.
The Department of Energy and Climate Change (DECC), in collaboration with other government departments, is working with the downstream oil sector to conduct a review of the role of the UK’s refining and import sectors in the supply of refined oil products into the UK market. It will assess the contribution that both these sectors make to the economy, jobs and skills development and environmental protection, and the impact of policy and regulatory framework on competitiveness. Finally, it will identify action deemed as appropriate to incentivise investment and improve competitiveness to improve UK supply resilience.
The Call for Evidence has been launched to inform the review and will run for eight weeks. Conclusions from the review will be published towards the end of the year.
Refined oil products support our society and economy in functioning effectively by enabling the transport of goods, services and movement of people, and the supply of feedstocks for other processes such as chemicals. We need to ensure that the UK has a downstream oil supply chain that meets UK demand, is resilient, and also supports jobs and economic development.
The UK market is currently well supplied by both domestically refined and imported oil products. However, Government is considering how, in the light of a changing market, our demand for refined oil products is likely to be met over the next few decades as we move to a low carbon economy.
Responses to the Call for Evidence
DECC is seeking input from a wide range of stakeholders, including the UK refining and import sector, who have a direct and indirect interest in the downstream oil sector. It would be most useful if you could use the question proforma when responding.