Friday, 30 March 2012

Queuing for fuel at UK filling stations.

One of the UK trades unions (Unite) has received member approval from the fuel tanker drivers to call a strike in respect of deliveries of fuel to filling stations for Diesel/DERV and/or petrol/gas. By law the union has to give five days advance notice of the actual strike dates, but so far they've not been announced.

Some ill judged comments by a couple of government ministers has prompted the public to rush out and top up their vehicle fuel tanks prior to the strike. In some cases people are filling fuel cans with additional spare fuel, in the case of petrol if it is badly stored it can increase risk to the family home. On the whole I think that keeping the fuel tank well topped up is a good precaution in advance of a potential strike.

Unfortunately the public commercial fuel distribution system for petrol (gas) and diesel is a fragile model based on the "just-in-time-delivery" system which may reduce supplier costs slightly, but which has little resilience to a surge in demand or a sudden interruption of delivery. The filling stations only hold 2-3 day's supply of fuel in their storage tanks and depend on regular timely delivery by tanker lorries. The public know this and want to avoid the inconvenience of not having fuel for their vehicles so they take the next opportunity to top up with fuel which exacerbates the limited fuel supply problem. In this morning's news it is reported demand for petrol is 172% of the norm on 29th March 2012.

The filling station managers attempt to reduce the flow of fuel from their limited local storage tanks by shutting off most of the filling pumps on their forecourts. As anyone with a rudimentary knowledge of queuing theory knows reducing the number of service points for a single queue tends to lengthen the queues. As a consequence the whole thing spirals into a worsening situation, though in the longer term the overall amount of fuel consumed by motorists doesn't actually alter.

The whole situation would be considerably eased if the owners of filling stations were forced by legislation to routinely hold ten times the average daily fuel sales in their local storage tanks. In effect increasing the capacity of the system to withstand short interruptions to the supply chain. The cost would be a few pence per vehicle driver. In effect the interest payable on seven days fuel, even less if the tax system was altered to be charged when fuel is dispensed rather than when it is delivered. The suppliers blame the motorists for demand variation when in fact it is the suppliers who create the problem in the supply system.

Regular readers may be asking how this affects the operation of a trading floor/data centre which the normal focus of this blog.  Firstly there is the risk to the top up supplies of diesel to the standby generators. If tanker drivers are either on strike or are servicing public filling stations in preference it is a risk to your business. Secondly the fuel situation could affect vehicles of key personnel or delivery vehicles. Maybe the assumptions of availability of replacement fuel for your business are not valid, regardless of any contractual commitment by your suppliers. In the absence of a resilient national infrastructure for fuel supply it may be worth considering alternatives such as increased or dispersed fuel storage, perhaps even providing fuel to key employees vehicle during a national fuel supply crisis.

Here's another list of useful points to consider.

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