Context:

Britain faces a looming jet-fuel and diesel shortage driven by a long-term reduction in refining capacity, with only four refineries remaining and a heavy reliance on imports for kerosene. The closures since the 2010s, driven by poor returns, policy costs, and net-zero aims, have left domestic output with diminished scale and resilience. As a result, Britain imports the majority of its kerosene and much of its diesel, while stockpiles of kerosene are precariously low and prices across Europe have surged, pressuring air travel costs this summer. The government faces scrutiny over supply security, even as ministers argue that enough imports remain to avert rationing, while the broader economy braces for higher freight and hospitality costs. Looking ahead, the imbalance could persist without policy interventions or new investment in refining capacity, potentially constraining aviation demand and affecting consumers and industry alike.

Dive Deeper:

• Between 2000 and 2024, UK refinery output fell by 41%, and the big two local majors, BP and Shell, exited the market by 2011, contributing to a shrinking domestic refining base.

• Britain now has four refineries—Fawley (Exxon Mobil), Humber (Phillips 66), Pembroke (Valero Energy), and Stanlow (Essar)—together supplying around 85% of the UK market’s needs, after Prax Lindsey and Petroineos closed last year.

• Kerosene imports surged to 3.1 times UK production in 2024, and diesel imports rose to 2.5 times domestic output, leaving Britain reliant on foreign supply for these fuels, unlike petrol which remains relatively self-sufficient.

• Before 2022, Russia supplied about a fifth of UK diesel, but now roughly 58% of diesel imports come from the U.S. and the Netherlands; for kerosene, about 60% comes from Saudi Arabia, the UAE, and Kuwait, highlighting vulnerability to geopolitics.

• Kerosene stockpiles are only about one month of demand, a stark contrast to many peers, and the closure of strategic chokepoints like Hormuz heightens concern over supply disruption.

• Critics, including the Scottish National Party, argue Westminster failed to safeguard Grangemouth’s kerosene supply to Scotland, while ministers insist uninterrupted imports from the Netherlands and Antwerp mitigate rationing risk.

• Looking forward, higher European kerosene prices and constrained capacity imply higher airfares and reduced aviation capacity, though a potential uptick in home holidays could offer short-term relief to the domestic hospitality sector.