Why Brits are panic buying gasoline
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BURY ST EDMUNDS, SUFFOLK, UNITED KINGDOM – 2021/09/25: People filling their cars up at BP petrol station during the fuel crisis in Bury St Edmunds.
SOPA Images | LightRocket | Getty Images
LONDON — British drivers have been panic buying gasoline in recent days, leading to lengthy lines, gas station closures and concerns that doctors and teachers won’t be able to get to work.
While ministers from the UK government have repeatedly insisted there are no fuel shortages, the lines to reach gas stations have been long since the beginning of last week.
According to the RAC, unleaded fuel prices have soared by a penny over the past week due to this surge in demand. Meanwhile, U.K. retailer Halfords said the sale of jerry cans — which many motorists use to store gasoline — increased by 1,656% over the weekend.
Oil giant BP and Exxon Mobil‘s Esso confirmed Friday that they had temporarily closed a handful of their U.K. gas stations due to an industry-wide driver shortage which had impacted their supply chains. After days of gas stockpiling, the problem became more prevalent this week. Some gas station owners reported on Monday that 95% of their locations were still dry according to U.K. Petrol Retailers Association.
Sky News was told Tuesday by Transport Secretary Grant Shapps that there were “the first very tentative signs” of stabilization at forecourt storage. However, he admitted this wouldn’t be evident in long lines for gasoline.
What is the reason people are panic-buying?
The U.K. is stocked with gasoline, according to the British government. George Eustice (the country’s environment minister) said Monday to the BBC that people were purchasing gasoline when they did not need it.
The problem is not the fuel shortage itself, but the logistics of getting it to the consumers. According to estimates, the U.K. is facing a shortage of 100,000 truck drivers. This means deliveries of gasoline as well as other goods face severe disruptions. The government has taken some steps to help stabilize the supply chain — including putting the army on standby to help deliver fuel — but unease over the situation is still present among consumers.
Cathrine Jasson-Boyd associate professor in consumer psychology, Anglia Ruskin University, U.K., says that most of the chaos is due to “anxiety. anxiety. anxiety.”
In a Tuesday phone conversation, she explained to CNBC that panic buying is often fueled by uncertainty. “We’ve had a lot of studies during [the pandemic] that show people have been very anxious — people aren’t conscious of this, of course, but they have been very anxious. This means the foundations for higher levels of anxiety are in place.
Jansson Boyd stated that “fears of missing out” can kick in when there are reports or images of people lining up to buy gasoline.
“People wonder if it is worth doing if everyone else does this. She explained.
She explained that they keep hearing of it and don’t have a clear solution. If you think toilet paper and Covid at the beginning of the pandemic, that was the same thing. There was no solution [being offered]. There was no solution. People felt they had to do something. Even if this isn’t rational, it makes us feel that unless we act, everything will go wrong. People will buy stuff even if they don’t have to.
In recent days the government announced measures to minimize supply shortages. These included temporary visas that allow truck drivers to enter and suspending fuel competition laws. The three-month visas were criticized for not being sufficient to attract foreign drivers. However, ministers and fuel suppliers insist that the problem does not stem from the refining or supply of gasoline.
Jansson-Boyd said that although the government has stated, “Don’t panic, there are no shortages,” he did not believe people were hearing any solution. The best thing for people to do is calm down. They need structures designed that they can rely on. This is only increasing anxiety and people will continue to panic buy.
CNBC also heard Tuesday from Dominik Piehlmaier (a University of Sussex Business School lecturer in Marketing). He said that panic buying is a common behavior. People will go to gas stations, wait hours, and then buy fuel because they fear for their lives.
Piehlmaier conducted an experiment to determine what could cause panic buying. He found that showing images of empty shelves on supermarket shelves would suffice to increase anxiety levels and make people feel more dangerous.
In a telephone conversation, he explained that “Seeing is believing” and people react to these images. It depends on whether they’ve been in similar situations where they felt weak and powerless or vulnerable. People feel the need to find a gasoline station open for customers in a crisis situation. In this way, government officials can speak whatever they like, as long as images are available.
Piehlmaier stated that pictures in the media and social media sites were more effective at triggering the reaction of the public than the politicians telling them. This was because the people who saw the images first-hand were more likely then what the politicians had to say.
The problem is:
Fuel shortage is not caused by gasoline shortage. It is due to a lack of truck drivers.
Road Haulage Association in the U.K. estimates there’s a shortage of truck drivers. The problem has been compounded by many factors, including Brexit and changes to regulation regarding employment.
Driver Require, an industry think tank, estimates that over 15,000 EU truck drivers have fled the U.K. since the Covid-19 pandemic.
New drivers were also prevented from entering the workforce by the pandemic. According to the RHA, only 15,000 people were able to successfully complete training in 2020 — that’s 25,000 fewer than the previous year.
In the lead up to Christmas, the British government introduced thousands of temporary visas to ease the strain caused by EU driver exodus. Experts are concerned about how long the crisis will last if there is no way to train or hire drivers capable of filling the gap.
The country is not equipped to allow people to buy five times the fuel they use in one week. That’s simply not the way the supply chain operates. It’s extremely difficult to restore it to meet this demand in a short amount of time,” Joe Armitage (lead analyst for U.K politics at Global Counsel) told CNBC’s Squawk Box Europa on Tuesday.
The government cannot prepare ahead for this. We are entering a different economy than the one that we left. Some sectors are much larger than they were before, and the sectors that are larger are the ones that require HGV [truck] drivers. [Companies] with the profit margins are able to poach or retain their drivers through increased pay, but the ones with the slimmer profit margins — such as the downstream oil sector — just can’t afford to do that, so they’re suffering.”
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