Statistical review

2010
Statistical review 2010 www.ukpia.com June 2010
 UKPIA Statistical Review 2009

About UKPIA
UKPIA represents the non -

commercial interests of and speaks

for nine companies involved in the

UK downstream industry, whose

activities cover refining, storage

and distribution, and marketing of

petroleum products.

Our members are:

2
 Introductions and overview
Contents
Overview

Section Overview Page No.

Introductions and Introduction and overview of UK refining.

Overview 4

1 Economic The refining and marketing sector is a major

Contribution contributor to the UK’s economy. 10
There are eight operational crude oil refineries in
2 Refineries the UK, which supply the equivalent of 90% of the
UK’s oil product demand.
13

3 Road Transport Petrol and diesel supply the vast majority of road
Fuels transport energy requirements. 17

4 Biofuels The introduction of biofuels is the biggest change to road

19
fuels in decades.

5 Other A wide variety of fuels are produced, and the jet fuel
Products market is expanding. 21

6 Petrol Prices Pre-tax petrol prices in the UK are consistently amongst

the lowest in Europe. 23

7 Diesel Prices Pre-tax diesel prices in the UK are consistently amongst

the lowest in Europe. 25

8 Filling Stations The number of filling stations in the UK is declining; there

are now around 8,921. 27

9 Air Quality UK air quality is improving; in part this is due to higher

quality fuels and improved vehicle technology. 29

10 Greenhouse Emissions of carbon dioxide from road transport per km

Gases
driven are virtually static and the oil industry expects them
to fall in the future.
34

11 Health & Safety The refining and marketing sector is one of the safest
industries in the UK. 36

12 Service Station Service station crime costs the industry £20m a year.

Crime
Ensuring the safety of staff and customers while reducing
losses is the industry’s main aim. 38

All data is updated as far as possible. Where data is not available the most recent statistics have been used.

statistical review 2010

3
Introductions and overview

Introduction from the Energy Minister

I congratulate UKPIA on the publication of their eighth annual Statistical Review, the result of continuing
successful and constructive collaboration between UKPIA, the oil companies that it represents, and the
Department of Energy and Climate Change.

The UK oil industry, from offshore production to the downstream oil sector represented by UKPIA, plays
a critical role in the life of the nation; by delivering secure supplies of energy, contributing to our broader
economic development and by helping us adapt to the challenges posed by climate change. This role
is particularly challenging (and particularly valued) at a time when the wider economy is experiencing
significant financial challenges.

During the past year, the Government and UKPIA have worked closely on a range of projects, including
work on the future direction of policy on emergency oil stocks, and the resilience of our downstream
oil sector in the face of the changes that the industry will face over the coming years. The fact that this
work, and the UK’s understanding of its energy use more generally, is supported by reliable and accurate
data, shared by industry and Government, is a substantial and welcome achievement.

On a personal basis, I have been very grateful for the helpful input I have received from UKPIA on issues
facing this crucial industry.

I am delighted to take this opportunity to mark the continued contribution of UKPIA to data transparency
and the collaboration between industry and government.

Charles Hendry
Energy Minister
June 2010

4

Introduction from the President
I am delighted to be writing the
President’s introduction to the
UKPIA Statistical Review 2010.
In 2009 we marked the 30th
anniversary of UKPIA’s formation
and I think it would be fair to say
that it proved to be one of the most
challenging years for refiners in the
UK, and across the rest of Europe,
for many decades.
Before touching upon some of
the challenges that face us, it is
worth pointing out the value of
the information in the Review.
As usual, it gives an interesting
insight into some of the facts and
figures about the UK’s energy use
in transport, one of many areas
where our member companies
continue to play a crucial role in
supplying transport fuels and other
products that support everyday
life. But above all, accurate data
is an essential tool in business
decisions, particularly in the current
challenging conditions, so I am
pleased to acknowledge the work
of the DECC (Department of Energy
and Climate Change) statistics
group, UKPIA’s Secretariat and our
member companies for bringing all
this data together.
Industry and government working
together will be an essential feature
of meeting the future challenges
of the refining sector, as well as
addressing the wider energy issues
Introductions and overview
facing the nation, where refining We look forward to addressing
plays, and will continue to play, a these matters with the new Minister
vital role in future security of supply. and his team at DECC in the
coming months.
UKPIA is closely involved in
contributing to a number of Finally, safety remains our number
downstream oil sector studies by one priority for the industry, as
DECC, particularly those looking outlined in UKPIA’s Commitment
at refining, supply and distribution Statement on Process Safety
infrastructure and compulsory oil Leadership. The ongoing work
stocking. All these areas have a to underpin delivery of our
major impact upon our security commitments, working closely with
of supply in keeping the country member companies’ specialists
moving on the roads and in the air, through UKPIA’s Process Safety
whilst at the same time working to Leadership Network, continues. We
reduce carbon emissions. also aim to draw on the experience
of all the high hazard industry
In opening, I mentioned the difficult
sectors through the Process Safety
times we face. UK refineries, in
Forum and in continuing support
common with those in the rest
of the cross-sector Process Safety
of the EU, are under enormous
Leadership Group.
pressure through a combination
of a tough operational climate I should like to record our thanks
with reduced demand for oil for everyone’s continuing input into
products, structural imbalances in all these groups and the work of
supply/demand and a challenging UKPIA generally.
legislative background in the EU
and the UK.
Analysis of the European market by
energy analysts Wood Mackenzie, Brian Worrall
indicated that the decline in
June 2010
product demand and the volatile
market conditions during 2008/9,
affected European refining industry
profitability. Increased competition
from export refineries, particularly in
Asia, and reduced demand from the
USA, the traditional export market
for excess gasoline production in
the UK and the rest of Europe,
compounded the problems. Wood
Mackenzie expects these conditions
to persist until at least 2020 with
little recovery in demand expected.
UK refineries need to compete
for major investment funds with
other projects globally. A climate
conducive to the continued
development of a strong and viable
downstream sector needs to be
promoted and with this in mind,
UKPIA and its members are looking
at a number of key legislative and
other actions that we feel may help.
statistical review 2010
5
Introductions and overview

Processing Crude Oil in a Typical UK Refinery

Many refineries in the UK came on stream in the 1950s and 1960s. Since that time they have evolved to meet the
growing demand for transport fuels and reducing demand for heating and power generation from oil. The composition
of fuels has also changed over recent years to reduce the environmental impact of their use. In addition to transport
fuels, refineries produce a wide variety of important feedstocks used in the manufacture of other products, such as
petrochemicals, lubricating oils, solvents, bitumen and petroleum coke for aluminium smelting.
No two refineries are identical. They share common technology such as crude distillation, but each UK refinery takes a slightly
different route to achieve the common goal of extracting maximum value from each barrel of crude oil processed.

Typical refinery process units

Fuel Gas
for refinery
Sulphur boilers &
Recovery furnaces

Sulphur
LPG
Isomer

Unifiner
Crude
Reformer
Distillation Petrol
Crude Unit
oil Merox

Kerosene

Hydrotreater Import
Butane
Isomerisation Derv/
Merox Unit Heating oil
Vacuum
Fluid Catalytic
Distillation
Cracking Unit
Unit
Treating Alkylation
Units Unit
Gas
Liq Petroleum Gas Fuel oils
Petrol components
Kero components Visbreaker
Diesel components Unit
Fuel oil components

Refinery operations can be broken
down into five main processes:
• Distillation which separates crude oil
into different refinery streams
• Conversion and reforming which
improve the quality of these streams
and adjusts the yields to meet market
demand
• Desulphurisation which reduces the
sulphur in the streams to the
required level
• Blending of the refinery streams to
produce the final products meeting
current regulations and specifications
• Waste treatment ensures that all
waste meets current regulations and
standards
Distillation These fractions range from lighter, low
boiling point gases such as propane
The starting point for all refinery
and butane to heavier, higher boiling
operations is the crude distillation unit
point diesel and gas oil. They are then
(CDU). Crude oil is boiled in a distillation
sent on to other refinery units for further
column, which separates the crude down
processing. What is left over at the
into fractions with different boiling points.
bottom of the column is a liquid residue,
The crude oil enters the column near the
which requires further processing to
bottom and is heated to around 380°C.
be turned into more valuable, lighter
The lighter fractions are vaporised and
products or blending components.
rise up the column. As they rise, they are
This residue is first sent to a second
cooled by a downward flow of liquid and
stage of fractional distillation in the
condense at different boiling points. This
vacuum distillation unit (VDU). This unit
enables fractions with different boiling
performs the distillation under reduced
points to be drawn off at different levels
pressure which allows the distillation of
in the column.
the crude residue at lower temperatures.

6

Using the same approach as before
the VDU separates into different
components from gas oil to a heavy
liquid residue.
The streams from the CDU and VDU are
then processed further by the remaining
refinery units to provide the high quality
products that consumers expect and
that comply with all relevant legislation.
Conversion, Reforming,
Desulphurisation and
Blending of Different
Streams
Distillation does not produce enough
of the lighter, more valuable products
such as petrol that the market wants.
Therefore conversion units eg fluidised
catalytic cracking (FCC) are used to
process some of the streams from the
vacuum distillation column with the aim
of turning the heavy components into
lighter transport fuels. Reforming units are
used to upgrade the octane of the petrol
components produced from the CDU.
Desulphurisation units are then used
to remove sulphur from the products.
This enables the products to meet
today’s tighter fuel specifications. Extra
desulphurisation will be required to
allow the refinery additional flexibility to
process higher sulphur ‘sourer’ crude
oils. Reliance on low sulphur crude oils
alone limits the flexibility of a refinery.
Main Products
LPG (liquified petroleum gas) is taken
directly from the crude distillation unit
and the FCC unit.
Petrol streams from the distillation
process are cleaned in the unifiner.
This unit strips out excess sulphur
and nitrogen compounds as hydrogen
sulphide and ammonia.
The streams are then sent on to the
catalytic reformer and isomer units for
processing to raise the octane number
of the petrol by modifying its molecular
structure. The reformer produces
a large amount of hydrogen as a
by-product, and this is recycled for use
in desulphurisation (hydrotreater) units.
Finally the petrol streams from the
reformer, fluidised catalytic cracking
unit, the isomerisation unit and the
alkylation unit are blended to meet fuel
specifications and current regulations.
Jet fuel/kerosene streams from
distillation are cleaned in the merox unit.
This uses a caustic wash and additives
to remove sulphur compounds and to
inhibit gum formation.
Diesel/heating oil streams are
processed in the hydrotreater, which
removes sulphur and other unwanted
compounds using hydrogen and a
catalyst. The hydrotreater (desulphuriser)
is supplied with recycled hydrogen
from other process units such as the
reformer. The diesel/heating oil streams
are separately blended to meet fuel
specifications and current regulations.
The lighter fuel oil streams from the
VDU are processed in the FCC unit
whilst the heavier residues from the VDU
can be processed in the visbreaker.
Introductions and overview
In the FCC unit, heavy oils are reacted at
high temperature with a catalyst which
breaks the heavy fractions into more
valuable lighter products. The LPG and
petrol components are then cleaned in
a merox unit and some of the LPG is
converted in an isomerisation or alkylation
unit into high octane petrol blending
components. The FCC’s products are
blended into petrol, LPG, diesel/gas oil
and fuel oil product streams.
In the visbreaker, the heavy fractions
are held at high temperature until they
become less viscous. This stream is
then blended into other fuel oil product
streams.
The fuel oil components from the
different units are then blended to give
fuel oil meeting current regulations and
specifications.
Desulphurisation and
Waste Treatment
The sulphur recovery unit takes waste
hydrogen sulphide from the units which
remove sulphur from product streams.
The hydrogen sulphide is then reacted
with oxygen to give solid elemental
sulphur and water vapour. After
treatment, this sulphur is sold to other
process industries.
All other waste streams are treated
according to the current regulations.
statistical review 2010
7
Introductions and overview

Refineries in the UK

The members of UKPIA run the eight major operating refineries in the UK, which are situated around the coast for ease of

crude tanker access. They supply over 90% of the inland market demand for petroleum products. The UK has the fourth

largest total refining capacity in the EU and some UK refineries are among the largest in Europe.

Over many years, the refining sector has sought to minimise its impacts upon the environment and improvements continue

to be made to reduce emissions.

Section 2 covers refining in more detail, with key figures on production, changing product demand and refinery emissions.

INEOS Grangemouth

Petroplus Teesside
(in economic shutdown)

ConocoPhillips Humber
Shell Stanlow
Total Lindsey

Petroplus Coryton
Murco Milford Haven

Chevron Pembroke
ExxonMobil Fawley

Distribution of Products
Around 50 major oil terminals are supplied by pipeline (51% of the volume), rail (15%) and sea (34%) from UK refineries. There is an

extensive network of private and Government owned pipelines in the UK, with around 3,000 miles of pipeline currently in use.

The 1500 miles of privately owned UK pipeline network carries a variety of oil products, from road transport fuels to heating oil and

aviation fuel. It provides an efficient and robust distribution system across the UK and directly provides jet fuel for some of the UK’s

main airports. It can take several days for fuel to travel from the refinery to the terminal by pipeline. At the terminal, products are

stored in large above-ground tanks and are transported to the filling station by road tankers.

The Government also has an oil pipeline system which is largely designed to meet the needs of military airfields.

8
 Introductions and overview
Privately owned oil pipelines
Privately in England
owned oil pipelines and Walesand Wales
in England

U.K.O.P.
Shell
BP
Chevron HUMBER AND LINDSEY
MANCHESTER
Total
STANLOW
ESSO PIPELINE SYSTEM
NOTTINGHAM
MAINLINE PIPELINE SYSTEM
Esso KINGSBURY
Chevron
BIRMINGHAM
Total
Shell
NORTHAMPTON

WALTON GATWICK PIPELINE

BP
PEMBROKE AND BUNCEFIELD
Shell MILFORD HAVEN HEATHROW
CORYTON/THAMES
Chevron AVONMOUTH WEST LONDON

PURFLEET
GATWICK
WEST LONDON PIPELINE
BP
Shell FAWLEY
Chevron
Total

FINA-LINE

Government oil pipelines in England

Government and Wales
Pipeline System

INGRESS LOCATIONS:

KILLINGHOLME RAWCLIFFE

(Total, Conoco, BP) BLACKMOOR KILLINGHOLME

BACKFORD MISTERTON
BACKFORD
(Shell) BRAMHALL

HETHERSETT
AVONMOUTH

HAMBLE SAFFRON
SANDY
(BP, Esso) WALDEN
CLAYDON
ISLE OF GRAIN STANSTED
(BP, BA) PURTON
HALLEN THAMES
THAMES HAVEN HAVEN
AVONMOUTH ISLE OF GRAIN
(BP, Shell, O.I.K.O.S.) ALDERMASTON
WALTON

HAMBLE

statistical review 2010

9
1. Economic Contribution and Refinery Economics

1. Economic Contribution and Refinery Economics

The oil refining and marketing industry plays an important are sold in the UK each day to an estimated 4 million

role in the UK’s economy, supplying over 33% of the customers. Our industry collects over £30 billion in fuel

primary energy used in the UK from a secure supply duty and VAT each year, and employs over 150,000 people

base. Around 130 million litres of petrol and diesel at refineries, head offices, forecourts and as contractors.

1.1 Contribution to 1.2 Duty from Road Fuels

Balance of Payments

Contribution to Balance of Payments Duty from Road Fuels

2000 30

25

20
Contribution (£m)

Duty (£bn)

1000
15

10

0 5
1992 1994 1996 1998 2000 2002 2004 2006 2008
0
93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10
(p)
-1000
Source: DECC Source: HM Treasury/HMRC

• Oil refining has historically been a major contributor • The 2009 Budget estimated fuel duty receipts for
to the UK’s balance of payments 2009/10 are £26.2 billion. In addition, around £6.9
billion was collected as VAT on road fuels
• However, the growing demand for diesel and jet fuel,
and the falling demand for petrol, has resulted in the • This combined figure is comparable to around a
UK becoming increasingly reliant on large-scale fifth of UK’s annual expenditure on road transport
imports of diesel and jet fuel
• Oil products will remain central to the nation’s energy
needs for decades to come, but increasingly alternative
fuels will play a more important role

1.3 Average Return on Capital Employed

5 Year Average Return on Capital Employed • The average return on capital employed for
30
1999-2008 in the downstream oil industry
was 11.6%

20
• Over the same time period, manufacturing
industries’ ROCE was 9.45% on average,
ROCE (%)

and that of service industries was 16.4%

10 • Service industries include communications,
hotels, catering, distribution, transport and
storage.
0
UKPIA Manufacturing Services Upstream Oil
Production

Source:UKPIA/Office for National Statistics

10
 1. Economic Contribution and Refinery Economics
1.4 Gross Sales 1.5 Refining and Marketing
Employment
Gross Sales Refining and Marketing Employment
120 25000

100 20000

80
Sales (£bn)

Employees
15000

60
10000
40

5000
20

0 0
1993 1996 1999 2002 2005 2008 1993 1996 1999 2002 2005 2008

Source: UKPIA Source: UKPIA

• In 2008, gross sales by UKPIA member companies
in the UK were, including duty, £99 billion
• This is a considerable increase on the previous years’
sales, reflecting that year’s record crude oil prices,
which lead to higher product prices
• The refining and marketing industry is a major
employer in the UK, with over 16,000 people directly
employed by UKPIA members
• In addition, over 150,000 people are employed in
other roles, such as service station staff, contractors
and road tanker drivers

1.6 UKPIA Refinery Share 1.7 Regional Refining

of Inland Consumption Margins
UKPIA Refinery Share of Inland Consumption Regional Refining Margins
94 15
% share of inland consumption

92

10
90
Margin $/bbl

88
5
86

84
0
82 1992 1996 2000 2004 2008
1993 1996 1999 2002 2005 2008 NW Europe Singapore US Gulf Coast

Source: UKPIA Source: BP Statistical Review of World Energy 2009/ BP Trading Conditions Update

• In 2008, almost 90% of inland oil consumption in the • Refining is a highly cyclical business with low margins
UK was supplied by UKPIA member companies occurring in 1999 and 2002
• This provided vital energy resilience and security of • European and Asian refinery margins have been
supply to the nation significantly lower than those achieved by refineries
on the US Gulf Coast
• UK refineries also export products primarily to
Europe and America • 2009 witnessed a very low margin of around $0.2
per barrel in Singapore, and an overall significant
drop in margin in other regions reflecting in part
weaker oil demand due to the recession

statistical review 2010

11
1. Economic Contribution and Refinery Economics

1.8 NWE Refining Margins 1.9 Crude and Ex-Refinery

Prices

NWE Refining Margins Brent Crude (at 2000 prices) Crude and Ex-Refinery Prices 2009
4 40
35

3 30

Pence per litre

25
Margin $/bbl

20
2
15
10
1
5
0
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001 2003 2005 2007 2009 Petrol Diesel Crude Oil

Source: Wood Mackenzie Source: Wood Mackenzie/OPAL

• The underlying trend for European refining margins • Wholesale ex-refinery prices tracked crude closely
since 2000 has been around $2 per barrel in constant throughout 2009
money, after adjusting for RPI, but in 2009 dropped
significantly to below $1 per barrel • Crude oil has been the main driver for prices of refined
products such as petrol and diesel and reflected in
• Refining margin is the difference between cost pump prices in the UK and globally
of crude purchased and value of product sales
and needs to cover fixed costs of operators and
maintenance, and return on capital

12
 2. Refineries
2. Refineries
There are now eight major crude oil refineries operating 1999 and 2009, and some UK refineries are among the

in the UK, situated around the coast for ease of crude largest in Europe.

tanker access. Onwards distribution is achieved via Over many years the refining sector has sought

an extensive pipeline system plus road, rail and sea to minimise its impacts upon the environment and

transport. The UK has the fourth largest total refining improvements continue to be made to reduce emissions.

capacity in the EU, despite refinery closures in 1997,

2.1 UK Refineries 2.2 Number of Refineries

Number of Operating UKPIA Refineries

20
18
Number of major refineries
INEOS Grangemouth
16
14
Petroplus Teesside
(in economic shutdown) 12
ConocoPhillips Humber 10
Shell Stanlow 8
Total Lindsey 6
4
2
Petroplus Coryton
Murco Milford Haven 0
1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009
Chevron Pembroke
ExxonMobil Fawley
Source: UKPIA Source: UKPIA

• There are eight major crude oil refineries operating in • The number of major oil refineries in the UK has
the UK which supply the bulk (little under 90%) of the fallen from a high of 19 in 1975 to 8 currently in
inland market demand for petroleum products operation
• The refineries are situated around the coast and most • There are another two smaller speciality
are connected to pipelines for product distribution refineries in the UK producing bitumen and
other products
• Three refineries have been sold in recent years:
Grangemouth Refinery was sold to Ineos in 2005, • There are 98 mainstream refineries in the EU
Coryton Refinery was sold to Petroplus in 2007, and
Total sold their share of Milford Haven to Murco in 2007
• In 2009 the Petroplus Teesside refinery was placed in
economic shutdown and is currently operating as an
import terminal

2.3 European Capacity

European Capacity 1996 / 2008
3000
• In 2008 the UK had the fourth
largest refining capacity in Western
1996 2008
2500 Europe at over 1.8 million barrels
per day
Thousand barrels per day

2000
• 1996 was UK’s last year holding
the position of third largest refining
1500 capacity; refinery closures in the UK
and expansion in France reversed
1000
their positions

500
Germany Italy France UK Spain Neth Belgium

BP Statistical Review of World Energy 2009

statistical review 2010

13
2. Refineries

2.4 Refinery Throughput 2.5 Refinery Energy

Efficiency

Refinery Throughput Refinery Energy Efficiency

140 8

120 7

Fuel used as % of throughput

Throughput (million tonnes)

100 6

5
80
4
60
3
40
2
20
1
-
0
1973 1977 1981 1985 1989 1993 1997 2001 2005 2009p
1973 1979 1985 1991 1997 2003 2009p
Source: DECC (DUKES) Source: DECC (DUKES)

• Since the refinery closures of 1997 and 1999, UK
refinery throughput has fallen from its recent peak of
97 million tonnes of crude oil
• UK refinery throughput was 75 million tonnes in 2009
• Throughput depends primarily on product demand
and capacity
• Refineries use the equivalent of between 5 and 6% of
throughput as fuel, to provide energy to refine crude
oil into products for consumers
• More energy is required to meet the current high
demand for cleaner transport fuels and to meet
challenging environmental standards, but this has
been offset by improved energy efficiency at refineries

2.6 Sources of Crude Oil 2.7 Destination of

Oil Products
Sources of Crude Oil 2008 Destination of Oil Products 2009
Domestic
Africa deliveries
UK
Norway

Others
Exports
Russia
Middle East

Source: DECC (DUKES) Source: DECC (DUKES)

• Slightly under 80% of UK refinery crude throughput is • The majority of oil products processed at UK
from the North Sea (UK and Norway) refineries are consumed in the UK
– approximately 66%
• Currently, around 8% of crude oil processed at UK
refineries arrives from Russia and the Middle East, • The EU is the main destination for UK oil product
and a little over 10% from Africa exports, although the US is also an important export
area, particularly for excess petrol
• A range of sources of crude oil provides a secure
supply of energy

• This is important as crude output from the UK North

Sea will decline over the coming decade

14
 2. Refineries
2.8 Product Produced 2.9 Product Demand
Products Produced 2009 Product Demand 2009
30
30
Production (million tonnes)

Demand (million tonnes)

20
20

10
10

0
0
Petrol Gas Jet Fuel Fuel Oil Petroleum Burning Oil Others
Petrol Gas Jet Fuel Fuel Oil Petroleum Burning Oil Others
Oil/Diesel Gases
Oil/Diesel Gases
Source: DECC (DUKES - provisional data) Source: DECC (DUKES - provisional data)

• UK refineries are configured to meet historic higher • The majority of oil product demand comes from the
demand for petrol and fuel oil transport sector
• As a result of reducing demand, refineries now produce • UK refineries have been unable to produce enough
an excess of these products and are in deficit in others jet fuel or diesel, consequently these are increasingly
such as jet fuel and diesel imported to meet demand
• Altering refinery production to meet changing demand
will require major investment
• See UKPIA’s paper “Meeting our Energy Needs:
The Future of UK Oil Refining” for more information

2.10 Changes in Refinery 2.11 Changes in Product

Production Demand
Changes in Refinery Production Changes in Product Demand
100 100
UK production (million tonnes/annum)

Fuel Oil Gas Oil/Diesel Jet Petrol Fuel Oil Gas Oil/Diesel Jet Petrol
UK sales (million tonnes/annum)

80 80

60 60

40
40

20
20

0
0
1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009p
1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009p

Source: DECC (DUKES) Source: DECC (DUKES)

• The major change in refinery production over the last • The major change in product demand since 1979
forty years has been a significant reduction in the has been the decline of fuel oil demand and the
quantity of fuel oil produced growth of transport fuels
• The increase in gas oil/diesel and petrol seen in the • Since 1990 demand for petrol has fallen by over
80s and 90s has since levelled off 30% and gas oil/diesel and jet combined have
increased by over 50%
• Over the same period some of the surplus fuel oil
has been converted into petrol and gas oil/diesel or • Natural gas has largely replaced fuel oil for power
exported generation and gas oil for space heating

statistical review 2010

15
2. Refineries

2.12 Refinery CO2 2.13 Refinery SO2

Emissions Emissions
Refinery CO2 Emissions Refinery SO2 Emissions
30 240

25
Emissions (million tonnes)

180

Emissions (ktonnes)
20

15 120

10
60
5

0 0
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
Source: DECC (GHG Emissions) Source: AEA Energy & Environment

• Refineries emit under 3% of the UK’s CO2 emissions
and are included in the EU Emissions Trading Scheme
• Although it takes more energy to supply an increased
demand for transport fuels, particularly low sulphur
fuels, refinery CO2 emissions have fallen since 1970
as a result of improved energy efficiency and refinery
closures
• Refineries release SO2 when sulphur, naturally present
in crude oil, is burnt
• Refinery SO2 emissions have fallen by 60% since
1970, to around 72,000 tonnes in 2008
• This is due to investment to increase sulphur recovery at
refineries and the use of low sulphur North Sea crude oil
• Although there has been an increase in recent years
due to the use of higher sulphur crude oils, further
reductions are planned

2.14 Refinery NOX 2.15 Downstream VOC

Emissions Emissions
Refinery NOx Emissions Downstream VOC Emissions
50 250

40 200
Emissions (ktonnes)

Emissions (ktonnes)

30 150

100
20

50
10

0
0 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Refining/Storage VOC Emissions Distribution of oil products VOC emissions

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• NOx is formed as a result of the combustion of • Volatile organic compounds are produced in the
fossil fuels, and hence is produced at refineries downstream oil industry from the evaporation of oil
products
• Refinery NOx emissions have fallen by over a third
since 1990 to under 25,000 tonnes • Since 1990, refinery and storage emissions have fallen
by 70%, to 29,000 tonnes due to leak detection and
• This is due to the installation of abatement
repair programmes
technology at refineries
• Additional reductions in the downstream industry are
due to the introduction of vapour recovery equipment
at storage facilities, on petrol deliveries and at many of
the higher throughput filling stations

16
 3. Road Transport Fuels
3. Road Transport Fuels
Demand for road transport has increased significantly and lower aromatics levels. These improvements have

over the last 50 years and is currently projected to reduced atmospheric emissions of pollutants, but more

continue to grow in the future. Over recent years the importantly have enabled new technologies which

quality of road fuels has improved with the complete improve the efficiency of the vehicles and reduce the

removal of lead, the virtual removal of fuel sulphur environmental impact of road transport.

3.1 Demand for Road Travel 3.2 Road Fuels Sales

Demand for Road Travel Total Road Fuel Sales

700 60

600 50
Total sales (billion litres)

500
40
Billion km driven

Diesel
400
30
300
20
200 Petrol
10
100

0 0
1950 1960 1970 1980 1990 2000 2010 2015 2025 1973 1979 1985 1991 1997 2003 2009p

Source: DfT (“DfT Road Traffic Forecast 2008”) Source: DECC

• Road transport demand has been on an upward • Whilst total road fuel sales have shown a long
trend for decades, and despite a flattening in term increase since 1970, they dropped slightly
growth during the recession, demand is forecast to in both 2008 and 2009 due to a combination of
increase in future higher prices driven by the cost of crude oil and the
economic recession
• By 2025 demand is predicted to have grown by
almost 60% from 1990 levels, although at a slightly • Out of total sales, the share of petrol has been
lower rate than past decades falling, whilst that of diesel has been rising due to
an increased proportion of diesel vehicles

3.3 Petrol Sales

Petrol Sales
35 • Sales of petrol have been falling
30
since reaching a peak of 33
billion litres in 1990 and in 2009
Total sales (billion litres)

25 represented around 47% of road

20
transport demand by litres sold

15
• Sales of petrol were 22 billion litres
in 2009
10

0
Source: DECC 1973 1979 1985 1991 1997 2003 2009p

statistical review 2010

17
3. Road Transport Fuels

3.4 Diesel Sales 3.5 Maximum Sulphur in Petrol

Diesel Sales Max. Sulphur in Petrol
30 2500

25

Parts per million sulphur (ppm)

2000
Total sales (billion litres)

20
1500

15
1000
10
500
5

0
0
1990 1995 2000 2005
1973 1979 1985 1991 1997 2003 2009p
Legal Limit UK Actual
Source: DECC Source: BSI/UKPIA

• Sales of diesel have been steadily increasing for the • The level of sulphur in road fuels is limited by law
last twenty years reaching over 24 billion litres, and to ensure sulphur emissions are reduced and to
in 2009 represented around 53% of road transport enable new vehicle technologies
demand by volume
• From January 2009, all UK petrol was “sulphur
• This is the result of the increased popularity of diesel free”, containing less than 10 parts per million
vehicles due to their high efficiencies, perceived lower sulphur
running costs, and increased demand from commercial
vehicles
• However, diesel sales fell slightly and continued to
stagnate into 2009 due to high diesel prices and the
economic situation

3.6 EU Max. Sulphur 3.7 Sales of LPG for

in Diesel Transport
Max. Sulphur in Diesel Sales of LPG for Transport
4000 300
Parts per million sulphur (ppm)

250
3000
Total sales (million litres)

200

2000
150

100
1000

50
0
1990 1995 2000 2005 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Legal Limit UK Actual

Source: BSI/UKPIA Source: HM Revenue and Customs

• The level of sulphur in diesel is also limited by law • As well as petrol and diesel, liquefied petroleum gas
(LPG) is used as a road fuel in the UK
• All diesel in the UK became “sulphur free” by
January 2009 (below 10ppm) • Sales of LPG rose rapidly between 2000 and 2006
based upon a favourable duty incentive and favourable
treatment under the London Congestion Charge
• However, the gradual reduction in the duty differential
between LPG and alternative fuels since has impacted
on the sales of LPG/petrol cars, which in turn has
affected sales of LPG, lowering sales to 212 million litres
down from its 2006 peak of almost 250 million litres

18
 4. Biofuels
4. Biofuels
Biofuels have the potential to reduce UK emissions of ensure that the Government’s targets are met under
carbon dioxide from road transport. The main biofuels the Renewable Transport Fuels Obligation (RTFO)
available today are bioethanol and biodiesel, and and that fuel quality standards are maintained. Key
standards currently permit these fuels to be blended up considerations are the amount of carbon saved by
to 5% by volume with petrol and 7% with diesel. different biofuels, the sustainability of the source
The introduction of biofuels into road transport fuels is material, food crop production and the carbon balance
the single biggest change to road fuels for decades. associated with land use change.
The downstream oil industry is working hard to

4.1 RTFO Targets 4.2 UK Bioethanol

Consumption
RTFO Targets UK Bioethanol Consumption
6% 480
440
% volume biofuel in road fuels

400
360
4% 320
Million litres

280
240
200
2%
160
120
80
0% 40
07/08 08/09 09/10 10/11 11/12 12/13 13/14 0
01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10

Source: HMT Source: HMRC *(provisional data covering period April 2009 to March 2010)

• The RTFO was introduced in April 2008, with an • Between January 2005 and March 2010, the
original target of 5% biofuel content in road fuels Government introduced a 20 pence per litre duty
by 2010/11 reduction on bioethanol
• However, this was revised due to sustainability • In 2009/10, UK bioethanol consumption stood at
concerns and the targets for the biofuel content of 430* million litres, which represents around 2% of
road fuels are now 3.5% by 2010/11, rising to 5% all petrol sales by volume
by 2013/14 • The duty differential of 20 pence was removed in
• At the 5% level it is estimated that up to 3 million 2010, with the buy out price set by the Government
tonnes of carbon dioxide would be avoided at 30 ppl

4.3 UK Biodiesel Consumption

UK Biodiesel Consumption
1200
• Between July 2002 and March
1000 2010, the Government introduced a
20 ppl duty reduction on biodiesel
800
• In 2009/10, UK biodiesel
Million litres

600 consumption was 1068* million litres

• This represents over 4% of diesel
400
sales by volume
200 • The duty differential of 20 pence
was removed in 2010, with the buy
0
01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 out price set by the Government at
30 ppl
Source: HMRC *(provisional data covering period April 2009 to March 2010)

statistical review 2010

19
4. Biofuels

4.4 UK Progress towards 4.5 Duty and Buy Out

RTFO Targets for Biofuels
UK Progress towards the RTFO Targets Duty Differentials and Buy Out for Biofuels
4% 40
Bioethanol Biodiesel
Duty Differential Buy Out
% volume biofuels in road fuels

3% 30

Pence per litre

2% 20

1% 10

0% 0
Jan Apr Jul Oct Jan Apr Jul Oct Jan 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11
2008 2009 2010

Source: HMRC/RFA Source: HMT/ RFA

• The UK added 2.6% of biofuels during the first year of • A duty differential of 20 pence per litre has been in place
the RTFO (2008/09), exceeding the target of 2.5% for biodiesel since 2002 and for bioethanol since 2005
• In the 2nd year of the RTFO (2009/10), the current • In addition, a ‘buy out’ price for the RTFO was
provisional data indicates the UK is close to meeting introduced at 15 ppl in 2008/09, giving a combined
the target of 3.25% of biofuels incentive of 35 ppl
• For 2010/2011, the target is 3.5% • The buy out price effectively acts as a safety valve for
the fuel supplier if the bio component is not added
to the final blend
• The duty differential was removed in 2010, with the
buy out price set by the Government at 30 ppl

4.6 Sources of Biofuels Used in the UK

Sources of Biofuels by Country Sources of Biofuels by Crop
Unknown 14% USA 14% Soy 29%

Denmark 2% Wheat 1%
Sugar Beet 4%
Other 3% UK 10% Palm 8%

Malaysia 5% Sugar Cane 19%

Argentina 19% Oilseed 14%
Indonesia 2%
Other 1%
Germany 8% Unknown 7%
Tallow 14% UCO 3%
France 4%
Brazil 19%

Source: RFA (covering period April 09 – Jan 10)

• Roughly 10% of biofuels used are produced in the UK; • Ethanol is mostly sourced from sugar cane
the remainder is imported • Biodiesel is mostly sourced from soy and rape
NB: ‘Other’ includes Belgium, Canada, Hungary, Ireland, Italy, Latvia,
Netherlands, Pakistan, Poland, Sweden, Switzerland & Ukraine

20
 5. Other Products
5. Other Products
A wide range of products are produced from crude oil, domestic/industrial demand for other fuels has altered

ranging from transport and domestic/industrial fuels to markedly over the last twenty years as sales of fuel oil

chemical feedstocks. Over time, refinery configurations and gas oil have reduced, being displaced in power

have developed to increase the quantities of high value generation and industrial applications by natural gas.

transport fuels that can be produced. In contrast,

5.1 Refining Production 5.2 Fuel Oil Deliveries

Refining Production in 2009* Inland Fuel Oil Deliveries
50
Naphtha
LPG 40
Petrol Deliveries (million tonnes)

30
Jet and
Kerosene
20
Diesel
and Gas
Oil 10

Fuel Oil 0
Bitumen
1973 1979 1985 1991 1997 2003 2009p

Source: DECC *(excludes refinery use and losses) Source: DECC

• Refineries produce Naphtha, LPG, road fuels, • The demand for fuel oil has reduced significantly
kerosene, jet fuel, heating oil, gas oil, fuel oil, since 1970, rising only briefly in 1984 due to the
bitumen and other products such as chemical miners’ strike
feedstocks
• The reduction in demand is mainly due to fuel
• The current trend of production is away from heating switching to natural gas by electricity generators
fuels (fuel and gas oils) and towards transport fuels
• Product specification changes for marine fuels and
(petrol, diesel and jet fuel)
other off road diesel/gas oil fuels from January 2011,
• Refineries will require major investment to meet the moving them to a lower sulphur content, will impact
increased demand for diesel and jet fuel middle distillate capacity

5.3 Inland Gas Oil Deliveries

Inland Gas Oil Deliveries
16
• The UK demand for gas oil has
14 fallen since 1970
Deliveries (million tonnes)

12 • Gas oil is produced from a similar

10 fraction of crude oil as diesel
8 • The reduction in demand is mainly
6 due to fuel switching to natural gas
4

0
1973 1979 1985 1991 1997 2003 2009p
Source: DECC

statistical review 2010

21
5. Other Products

5.4 Kerosene Deliveries 5.5 Aviation Fuel Deliveries

Inland Kerosene Deliveries Inland Aviation Fuel Deliveries

4.5 15

4
12

Deliveries (million tonnes)

3.5
Deliveries (million tonnes)

3
9
2.5

2
6
1.5

1 3
0.5

0 0
1973 1979 1985 1991 1997 2003 2009p 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009p

Source: DECC Source: DECC

• Kerosene (also called burning oil) is used as fuel
for domestic and industrial heating, and sales are
typically higher during winter
• Inland sales of kerosene have increased since 1980
• New legislation introduced in January 2008 restricted
the sulphur levels in kerosene to 0.1%
• Aviation turbine kerosene is used in jet engines
• Sales of AVTUR have been growing steadily since
1970, and growth is projected to continue
• Aviation fuel demand has fallen in the last two years
due to reduced passenger numbers and cargo
volumes experienced during the recession

5.6 Bitumen Deliveries 5.7 Lube Oil Deliveries

Inland Bitumen Deliveries Inland Lube Oil Deliveries

3 1.4

2.5 1.2
Deliveries (million tonnes)
Deliveries (million tonnes)

1
2
0.8
1.5
0.6
1
0.4

0.5 0.2

0 0
1973 1979 1985 1991 1997 2003 2009p 1973 1979 1985 1991 1997 2003 2009p

Source: DECC Source: DECC

• Demand for bitumen has declined to just over 1.3
million tonnes/pa
• Bitumen is produced from some of the heaviest
fractions of crude oil and is mainly used for road
surfacing and roofing
• Sales of lubes and greases have fallen since 1970 to
around 0.5 million tonnes/pa
• Improved engines require fewer oil changes and the
use of synthetic lubricating oils has also contributed
to this reduction
• The introduction of biodiesel could see oil drain
intervals reducing and demand for lubes increasing

22
 6. Petrol Prices
6. Petrol Prices
As a result of the UK’s competitive road fuels retail (VAT and duty combined represent around 67% of the

market and efficient distribution facilities, the pre- average pump price in 2009).

tax price of major brand petrol in the UK has been Following the 2008 price spike, average annual petrol

consistently amongst the lowest in Europe. However, prices dropped in 2009 quite significantly. Despite this

despite this competition, the price paid by consumers at reduction, the price in real terms still remains higher

the pump has been one of the highest in Europe, due to than in 2007.

the higher levels of duty applied by the Government

6.1 Petrol Pump Price 6.2 Average Contribution

to Pump Price
UK Petrol Pump Price Breakdown
120 Average Contribution to Pump Price 2009

100 Duty / VAT

67%
80 Retail /
Pence per litre

Ex-refinery
60 Price Spread
5%
40 Duty/VAT

20
Ex-Refinery
Pre-tax Price
0
27%
1989 1993 1997 2001 2005 2009

Source: Wood Mackenzie/OPAL *The price of petrol in figure 6.1 is in money of the day Source: Wood Mackenzie/OPAL

• Petrol prices fell in 2009 following the previous years • Duty and VAT are the main components of the pump
unprecedented price increase price of petrol in the UK, making up over two thirds
of the total
• The average annual pre-tax price of petrol rose over the
last few years after a long period of relative consistency, • From 1st April 2009 duty went up from 52.35p to
and continued to do so in 2009 when compared to 54.19p and again in October to 56.2p on a litre of
2007 and previous years, with the exception of 2008 unleaded petrol
• This increase reflected the general rise in crude oil • VAT is charged on both the cost of fuel and duty.
prices, resulting from increased global demand It was temporarily cut from 17.5% to 15% on 1st
December 2008 to 1st January 2010
• The increases in duty in December 2006, October
2007, December 2008 and April 2009 also • The average retail/ex-refinery price spread for 2009
contributed to the rise in pump prices was a little over 5 ppl

6.3 European Prices

Pump Prices of Unleaded Petrol 2009
120 • In 2009 the UK pre-tax price of
100 major brands of unleaded petrol
was again the lowest in Europe at
80
32.5 ppl
Pence per litre

60
• The price paid at the pump by
40 UK consumers was, however,
20
considerably higher due to the
levels of fuel duty
0
UK Ger Spain France Neth Italy Bel Lux
Excl Duty & VAT Duty & VAT
Source: Wood Mackenzie/OPAL

statistical review 2010

23
6. Petrol Prices

6.4 Pre-Tax Petrol and 6.5 Fuel Price & Tax

Crude Prices Comparison
Pre-Tax Petrol and Crude Prices Fuel Price and Tax Comparison
50 200

Duty & VAT

40
150
Pence per litre

1990 = 100
30
Petrol Price
100

20 Pre Tax Price

Crude Oil Price 50

10

0 0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: Wood Mackenzie/OPAL Source: Wood Mackenzie/ONS

• The pre-tax price of petrol has generally reflected the • The pre-tax price of petrol only recently increased
cost of crude oil relative to 1990 levels, having remained below RPI
adjusted 1990 prices until 2005
• The effect of crude prices on the final pump price has
been lessened by the high levels of fuel duty • Duty and VAT steadily increased relative to 1990 levels
throughout the 90s, until they were effectively frozen
• The £/$ exchange has been a key factor in
following protests in September 2000
determining fuel prices
• They have recently risen again, and continue to show
a greater increase over the past 18 years than the
pre-tax price

24
 7. Diesel Prices
7. Diesel Prices
The UK road fuels retail market is highly competitive Following the 2008 price spike, average annual

and distribution facilities are efficient; consequently, the diesel prices dropped in 2009 quite significantly. Despite

pre-tax price of major brand diesel in the UK has been this reduction, the price in real terms still remains higher

consistently amongst the lowest in Europe. Despite this than in 2007.

competition, the price consumers pay at the pump in

the UK has been the highest in Europe, due to the much

higher level of duty applied to diesel in the UK.

7.1 Diesel Pump Price 7.2 Average Contribution

to Pump Price
UK Diesel Pump Price Breakdown
140
Average Contribution to Pump Prices 2009
120
Ex-Refinery
100 Price 29%
Pence per litre

80

60

40 Duty & VAT

Retail/ Ex-
20 Refinery Price
Excl. Duty & VAT
Spread 6% Duty/VAT 65%
0
1989 1993 1997 2001 2005 2009
Source: Wood Mackenzie/OPAL *The price of petrol in figure 7.1 is in money of the day Source: Wood Mackenzie/OPAL

• Diesel prices fell in 2009 following the previous year’s • In 2009 duty and VAT made up almost two thirds of
unprecedented price increase the pump price of diesel in the UK
• The average annual pre-tax price of diesel rose over • The average retail/ex-refinery price spread for 2009
the last few years after a long period of relative consistency, was a little over 6 ppl
and continued to do so when compared to 2007, with the
exception of 2008 • From this the oil company and retailer must cover all
site, distribution and storage expenses
• This increase reflected rising crude oil prices, resulting
from increased global demand
• The increases in duty in December 2006, October 2007,
December 2008 and April 2009 also contributed to the
rise in pump prices

7.3 European Pre-Tax Pump Prices

Pre-Tax Pump Prices of Diesel 2009
42
• 2009 saw the UK once again
41
have the lowest major brand pre-
40
tax diesel price in the EU
Pence per litre

39
38 • The low UK pre-tax price is a
37 result of strong competition
36 amongst retailers and an efficient
35 fuel distribution network
34
33
UK Ger Spain Ireland France Neth Lux Italy Bel

Source: Wood Mackenzie/OPAL

statistical review 2010

25
7. Diesel Prices

7.4 European Pump Prices 7.5 Pre-Tax Diesel

and Crude Prices

Pump Prices of Diesel 2009 Pre-Tax Diesel and Crude Prices

120 60

100
50
Pence per litre

80
40

Pence per litre

60
Diesel Price
30
40

20 20
Crude Price
0
10
UK Neth Italy Fra Ger Bel Lux Spain Ire
Excluding duty & VAT Duty and VAT
0
1988 1992 1996 2000 2004 2008

Source: Wood Mackenzie/OPAL Source: Wood Mackenzie/OPAL

• The pump price of major brand diesel in the UK was • The pre-tax price of diesel is closely related to the
the highest in Europe in 2009, reflecting the high level price of crude oil
of duty paid on fuel in the UK
• The £/$ exchange is a key factor influencing fuel
• The UK is the only major European country to apply prices
the same duty rate to diesel and petrol

7.6 Fuel Price and Tax

Comparison
Fuel Price and Tax Comparison
200

Duty & Vat

150
1990 = 100

100
Pre Tax Price

50

0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: Wood Mackenzie/ONS

• The pre-tax price of diesel only recently increased

relative to 1990 levels, having remained below RPI
adjusted 1990 prices until into 2004
• Duty and VAT steadily increased relative to 1990
levels throughout the 90s, until they were effectively
frozen following protests in September 2000
• Despite the increase in pre-tax prices in 2008,
reflecting the rising cost of crude oil, the ratio of pre-
tax prices to duty and VAT is below the 1990 level

26
 8. Filling Stations
8. Filling Stations
Over the last forty years the number of filling stations litre sold. As a result many smaller filling stations have

in the UK has reduced dramatically, from over 37,500 in become economically unviable.

1970 to 8,921 at the end of 2009. Recently around 450 The only sector that grew in 2009 was large supermarket

filling stations have been closing each year due to strong sites, which continued to show growth in site numbers,

competition between fuel retailers and the increasing sales volumes and market share.

costs of compliance with environmental regulations. This

favours large service stations with lower overheads per

8.1 Number of Sites 8.2 Ownership of Sites

Total Sites Ownership of Sites
40000 25000

35000 Supermarket Oil Companies Dealer / Independent

20000
30000
Number of sites

Number of sites

25000
15000
20000

15000 10000

10000
5000
5000

0 0
1973 1979 1985 1991 1997 2003 2009 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: Energy Institute until 2005; Catalist onwards Source: Energy Institute until 2005; Catalist onwards

• At the end of 2009 there were 8,921 filling stations • Many filling stations owned and operated by both
in the UK oil companies and independent retailers have closed
due to competition and low returns on investments
• The number of filling stations is now around a
quarter of the 1970 total • The number of supermarket sites has been increasing
• Over the past ten years, the number of sites has • Independent sites still account for the majority of petrol
been falling at a rate of approximately 450 per year stations, accounting for almost 62% of total number
• In the last few years several oil majors have exited
the UK retail sector

8.3 Supermarket Sites

Supermarket Sites
1400
• At the end of 2009 there were
1200 1,220 supermarket filling stations
1000 in the UK
Number of sites

800
• Around 14% of filling stations are
now owned by supermarkets
600

400

200

0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: Energy Institute until 2005; Catalist onwards

statistical review 2010

27
8. Filling Stations

8.4 Supermarket Share 8.5 Throughput per Site

of Retail Sales
Supermarket Share of Retail Sales Throughput per Site
50 14

12
40
Petrol 10

Million litres / year

30 8
% of sales

Diesel
6
20
4

10 2

0
0
1996 1998 2000 2002 2004 2006 2008
1995 1997 1999 2001 2003 2005 2007 2009
Others Supermarkets

Source: DECC (ETS) Source: DECC / Energy Institute / Catalist

• In 2009 the share of retail sales of diesel by
supermarkets had risen from 34 to a little over 35%
respectively whilst petrol slightly declined to 40%
• Just under 40% of the total retail fuels sector is now
captured by supermarkets
• The average throughput of all filling stations has risen
markedly since 1994 to around 4 million litres per year
• The average supermarket site throughput is currently
just under 12 million litres per year

8.6 Access to Filling

Stations

Access to Filling Stations 2008

350

300

250
Sites/million people

200

150

100

50

0
England Wales Scotland Northern Ireland

Source: ONS / Catalist

• The number of filling stations per capita is highest in

Northern Ireland
• See UKPIA briefing paper – “Fuel Supply to Rural
Filling Stations” for more information

28
 9. Air Quality
9. Air Quality
One of the key drivers for the oil industry is reducing despite an increase in traffic levels of almost 25%. In

the environmental impacts from the use of fuels. Since urban areas, air quality has improved. In rural areas,

1990 road fuels and vehicles have become significantly most episodes of poor air quality are due to low level

cleaner, resulting in much lower exhaust emissions ozone from pan-European sources.

9.1 Vehicular Emissions 9.2 Air Pollution

Relative Vehicular Emissions of Pollutants - 1990 base Number of Days when Air Pollution is Moderate or Higher
120 120
1995 2000 2008

100 100
Average number of days
80 80
% 1990 levels

60
60

40
40
20
20
0
1993 1995 1997 1999 2001 2003 2005 2007 2009p
0
Benzene SO2 1,3 NOx VOC PM10 CO Rural Average Urban Average
Butadiene

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• Emissions of exhaust gas pollutants have been • Air pollution in rural and urban areas has fluctuated
significantly reduced from 1990 levels over time but there has been a general long term
decline in high air pollution days at both urban and
• The largest reduction has been made for SO2
rural monitoring sites
through the introduction of zero sulphur petrol and
diesel and this reduction is expected to continue • The variability of weather from year to year plays
with the move to zero sulphur fuels for off-road an important role; for example, the hot summers
machinery vehicles set for 2011 of 2003 and 2006 resulted in high pollution levels
mainly caused by ozone
• The comparatively cooler summer in 2007 ensured
air pollution reverted to low levels

9.3 Ozone • Global emissions of Volatile Organic

Compounds and NOx create a
baseline ozone concentration of
Number of Days Exceeding 100 g/m3 of Ozone approximately 60 µg/m3 in the
50 Northern Hemisphere
Rur. Av. Urb. Av. Obj.
• The long hot summers in 2003 and
40
2006 caused an increase in the
number of days which exceeded the
Number of days

30
target concentration of 100 µg/m3

20
• The narrow gap between ambient
levels in air blowing in from the
Atlantic and the maximum target
10
levels makes ozone a difficult
pollutant to control, especially as
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 episodes are usually caused by
Source: DEFRA/AEA Energy & Environment ozone from Europe

statistical review 2010

29
9. Air Quality

9.4 Primary Particulate 9.5 Road Transport PM10

Matter Emissions

Primary Particulate Matter Sources 2008 Road Transport PM10 Emissions

50

Other 40

PM10 emissions (ktonnes)

68%

30

20

Road
Residential transport 10
14% 18%
0
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• In 2007 the combustion of road fuels contributed 18% • Emissions of particulate matter (PM10) from road
of the UK’s primary emissions of particulate matter transport peaked in 1994 at 44,000 tonnes
• The residential sector produced 14% of the emissions, • Since then emissions have fallen by over 40% due
with the rest produced by other sources including to tighter standards for vehicular emissions and lower
industry and power generation sulphur content of fuels
• Ambient levels of PM10 include fine particles from • However, this is not helped by the increased
primary (around a third), secondary and other sources dieselisation of the car park, since PM10 emissions
are higher from diesel than petrol

9.6 Annual Average 9.7 Range of

PM10 Concentrations PM10 Concentrations
Annual Mean PM10 Concentrations at Urban Sites Range of PM10 Concentrations 2008
60

urban background
50 Highest site
value
Concentration ( g/m3)

40
roadside

30
UK Average

urban centre
20
Objective (by end 2010)

10
Lowest site value kerbside

0
1992 1994 1996 1998 2000 2002 2004 2006 2008 0 5 10 15 20 25 30 35 40 45 50 55 60 65

Concentration ( g/m3)

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• UK average PM10 concentrations at urban sites fell so • In the UK, PM10 concentrations are highest at
considerably that the 2010 objective, of an average kerbside locations next to busy roads in inner cities
20µg/m3, was reached over two years ahead of
schedule

30
 9. Air Quality
9.8 Sources of NOx 9.9 Road Transport
NOx Emissions

Road Transport NOx Emissions

1200

Energy Sources of NOx 2008 1000

Vehicle emissions (ktonnes)

industries
25% Road transport 800
32%

600

400

200
Other
43% 0
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• Nitrogen oxides (NOx) are mainly formed as a • Road transport NOx emissions have fallen by
by-product from the combustion of fossil fuels almost 60% from the 1990 peak
• 25% of the UK’s total NOx emissions in 2007 were • These reductions arise from the use of oxidation
from energy industries catalysts (diesel vehicles) and catalytic converters
(petrol vehicles) which have been enabled by lower
• The largest single source of emissions was road
sulphur in diesel and unleaded petrol
transport, producing 32% of the total
• Tighter EU exhaust emission standards will reduce
vehicle NOx emissions

9.10 Annual Average 9.11 Range of

NO2 Concentrations NO2 Concentrations
Annual Mean NO2 Concentrations at Urban Sites Range of NO2 Concentrations 2008
140

120 suburban

100
Highest site value
Concentration ( g/m3)

urban background
80

60
Average Objective urban centre
(by end 2005)
40

20 Lowest site value roadside

0
0 10 20 30 40 50 60 70 80 90 100
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Concentration ( g/m3)

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• Nitrogen dioxide is largely formed in the • Some monitoring stations in the UK still record annual
atmosphere from emissions of NOx average concentrations that do not meet the UK air
• Annual NO2 concentrations in the UK have fallen quality target of 40 µg/m3
by 45% since 1989 • NO2 is a greater problem in large cities, near busy roads
• These reductions were achieved by reduced and around airports
emissions from power generation, industry and
road transport

statistical review 2010

31
9. Air Quality

9.12 Sources of Benzene 9.13 Road Transport

Benzene Emissions

Sources of Benzene 2008 Road Transport Benzene Emissions

30
Road Transport 13%
Manufacturing

Benzene emissions (ktonnes)

7%

20

10
Other
15%
Fugitive Emissions Residential
from Fuels 9% 44%

0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• In 2008 road transport contributed 13% of the UK’s • Emissions of benzene from road transport have
benzene emissions reduced significantly since 1990 due to the
• Stage II Vapour Recovery is being fitted to large introduction of exhaust after-treatment technology
petrol stations enabled by unleaded petrol

• Benzene is naturally present in crude oil and is also • In 2000 emissions of benzene were further reduced
formed during refining following the lowering of the benzene and aromatics
limits in petrol
• Most benzene is removed to comply with
specifications

9.14 Sources of CO 9.15 CO Limit

Exceedences
CO Limit Exceedences
100

Sources of CO 2008
UK Average Highest site value
Residential
75
13%
Road
Periods exceeding 10 mg/m3

transport
55%
50

25

Other
32%
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• Carbon monoxide is formed from the incomplete • Since 1990 all DECC reporting stations have
combustion of fossil fuels recorded CO concentrations below national and
EU health objective levels
• In 2008 road transport contributed 55%
of the UK’s carbon monoxide emissions
• The residential sector produced 13% of emissions

32
 9. Air Quality
9.16 Road Transport 1,3- 9.17 1,3-Butadiene
Butadiene Emissions Concentration

Road Transport 1,3-Butadiene Emissions

14
1,3-Butadiene Concentration 2007

Maximum running annual mean(µg/m3)

2.5
Vehicle emissions (ktonnes)

Target
10 2.0

8
1.5

6
1.0
4
0.5
2
0.0
0 Glasgow London Cardiff Centre London Eltham Harwell
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Kerbside Marylebone
Road

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• Emissions of 1,3-butadiene have reduced by almost • In 2008, all DEFRA/AEA air quality monitoring
90% since 1990 stations for 1,3-butadiene in the UK reported
maximum running annual averages far below the
• Further reductions are expected as a greater
maximum permitted level of 2.25 µg/m3
proportion of vehicles meet new car exhaust
emissions standards

9.18 Sources of VOCs 9.19 Road Transport

Emissions of VOCs

Sources of VOCs 2008 Road Transport Emissions of VOCs

1000
Solvent and
VOC emissions (ktonnes)

other product
use 750
41% Others
19%
500

250
Fugitive
emissions from Road transport
Residential 14%
fuels
6% 0
20%
1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

Source: DEFRA/AEA Energy & Environment Source: DEFRA/AEA Energy & Environment

• In 2008 road transport contributed 14% of the UK’s • Road transport emissions of VOCs have dramatically
volatile organic compound emissions reduced since 1989 falling by over 90%
• The main source of emissions is from the use of • This reduction has resulted from the introduction of
solvents and paints catalytic converters on cars and the switch to more
diesel vehicles
• Refining, storage and distribution of oil products
were 7% of the total emissions

statistical review 2010

33
10. Greenhouse Gases

10. Greenhouse Gases

A key driver for the downstream oil industry is the risen by a rate well below the 14% increase in vehicle

UK Government’s commitment to reduce emissions kilometres over the last decade. Improvements in vehicle

of greenhouse gases by 80% by 2050 relative to 1990 efficiencies enabled in part by cleaner fuels are expected

levels. The main greenhouse gas is carbon dioxide, to reduce emissions in the future.

CO2. Emissions of CO2 from road transport have

10.1 Greenhouse Gases 10.2 Source of Carbon

and Commitments Dioxide
Sources of Carbon Dioxide 2008
Greenhouse Gases and Commitments
1000.00
Residential
Emissions (mtCO2e/year)

Business 15%
800.00
Kyoto target by 2008-2012 16% Other
8%
600.00
Carbon budgets
400.00

200.00
Basket of greenhouse gases Carbon dioxide
0.00 Road Transport
1990 1994 1998 2002 2006 2010 2014 2018 Energy Supply 22%
39%

Source: DECC Source: DECC/AEA Energy & Environment

• The UK is on track to meet the Kyoto protocol’s • Road transport produces approximately 22% of the
requirement to deliver a 12.5% reduction in greenhouse UK’s CO2 emissions
gases compared to 1990 levels by 2012
• The energy supply industry, along with the residential
• The 2009 UK Low Carbon Transition Plan set to and business sectors, are also major sources of CO2
reduce 34% of greenhouse gas emissions by 2020
• Carbon dioxide accounted for an estimated 85% of
relative to 1990.
the UK’s man-made greenhouse gas emissions in
• Emissions in 2010 have already been reduced 2008
by 21%

10.3 Road Transport CO2 Emissions • Since 1990, emissions from road
transport have risen at a much lower
rate than vehicle mileage
Road Transport CO2 Emissions
140 • This can be attributed to the use of
more efficient vehicle technologies
120
enabled by cleaner fuels, and an
100 increased proportion of diesel vehicles
Emissions (mtCO2)

80 • The CO2 levels from fuel use will

continue to reduce with increasing use
60 of biofuels as required by the RTFO
40

20

0
1972 1978 1984 1990 1996 2002 2008

Source: DECC/AEA Energy & Environment

34
 10. Greenhouse Gases
10.4 CO2 from New Cars 10.5 Sources of Methane
New Car Fleet Average CO2 Emissions
200

Sources of Methane 2008

190
Agriculture
37.59% Other
180
6.10%
CO2 g/km

170 Road Transport

0.26%
160
Gas Leakage
8.89%
150
Coal Mines
Landfill 5.71%
140
41.45%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EU average UK Business UK Private UK Average

Source: SMMT/European Commission Source: DECC/AEA Energy & Environment

• UK average new car CO2 emissions have fallen every • Road transport is not a major contributor to
year on record methane emissions, producing less than 0.3%
• Future emissions of CO2 from road transport will of the UK total in 2008
continue to be lowered by further improvements in
vehicle efficiency
• As the UK’s older vehicles are replaced and more
diesel cars purchased, the fleet efficiency will improve
• The current trend to smaller vehicles will also
contribute to lower emissions

10.6 Emissions of Methane 10.7 Sources of N2O

Road Transport Emissions of Methane Sources of N2O 2008

35
Agriculture
30 77%
Emissions (ktonnes)

25

20

15

10
Other Industrial
5 13% Road transport processes
3% 7%
0
1972 1978 1984 1990 1996 2002 2008

Source: DECC/AEA Energy & Environment Source: DECC/AEA Energy & Environment

• Despite the low level of emissions, reductions are
still being achieved as a result of the introduction
of exhaust after-treatment technologies
• Emissions in 2008 were 80% lower than the peak
around 1990
• In 2008 road transport was responsible for around
3%, down from 4% the previous year, of the UK’s
total emissions of nitrous oxide, N2O
• Agriculture is the main source accounting for over
two thirds of emissions, mainly from agricultural soils
• Weighted by global warming potential, nitrous oxide
emissions accounted for about 5% of the UK’s
man-made greenhouse gas emissions in 2008

statistical review 2010

35
11. Health and Safety

11. Health and Safety

The refining and marketing industry continued to favourably in terms of safety performance with European

maintain very high standards of occupational safety competitors, having consistently fewer reported injuries

in 2008. It remains one of the safest manufacturing amongst both employees and contractors. Particularly

industries in the UK, with proportionately fewer strong improvements have been made in contractor

injuries occurring than in the manufacturing sector as safety since the 1990s and these have been helped by

a whole. The UK downstream industry also compares the introduction of Contractor Safety Passport Schemes.

11.1 RIDDOR >3 Day 11.2 RIDDOR >3 Day Injuries

Injuries by Sector by Category of Worker

RIDDOR >3 Day Injuries 2007/08 RIDDOR >3 Day Injuries

1000 600
>3 Day injuries/100,000 workers

2000-01 2001-02 2002-03

500
>3 Day injuries/100,000 workers

800 2003-04 2004-05 2005-06

2006-07 2007-08

400
600

300
400

200
200
100
0
Extraction All All UK All Ref Mkt Ref 0
& Utility Manuftg Service Cont Empl Empl Mkt Employees Refy Employees Refy Contractors

Source: UKPIA/HSE Source: UKPIA

• Significantly fewer injuries (RIDDOR >3 Day) occur • In 2008, the frequency of injuries (RIDDOR >3 Day)
at refineries than in the manufacturing sector as a fell for refinery contractors to their lowest levels
whole recorded
• Injuries in downstream oil marketing are lower than • Although marketing and refining employee injuries
the UK average for other service sector employees increased over the last year, they have both stayed
well below their peak range

11.3 Refining Injuries

Refining Injuries
250
• Injuries reported at refineries in 2008
2000 2001 2002 2003 2004
2005 2006 2007 2008 remain around the very low levels
200
seen over the past few years
Reported incidents

150 • This reflects a continued high level

of attention to safe practices
100

50

0
Medical Treatment Restricted Work Injuries Lost Work Injuries
Source: UKPIA
Cases

36
 11. Health and Safety
11.4 Refining Lost Work 11.5 Refining Lost Work
Injury Frequency Injuries

Refining Lost Work Injury Frequency Refining Lost Work Injuries

5 8
Lost work injuries/million hrs

Lost work injuries/million hrs

4
6

Ref Staff Ref Contr

3
Contractor 4

2
2

1
Employee
0
0 2001 02 03 04 05 06 07 08 2001 02 03 04 05 06 07 08
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 UKPIA CONCAWE

Source: UKPIA Source: UKPIA / CONCAWE

• ‘Contractor’ lost work injuries at refineries have • Comparison with European safety data from
reduced in frequency since 1997 reaching the lowest CONCAWE indicates that UK refinery employees are
ever recorded levels. Recorded levels for contractors less likely to suffer a lost work injury than European
are now almost as low as those of refinery employees counterparts
• The introduction of refinery ‘Contractor Safety • CONCAWE is the European oil industry’s association
Passports’ has contributed to this fall over the for environment, health and safety
last decade

11.6 Marketing Lost Work

Injury Frequency

Marketing Lost Work Injury Frequency

10
Lost work injuries/million hrs

Contractor
6

4
Employee
2

0
2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: UKPIA

• Lost work injuries amongst marketing contractors

and employees have in recent years converged,
though with a slight increase in 2008, remain around
the very low levels seen over the past few years
• The ‘Contractor Safety Passport Scheme’ for
forecourt contractors introduced by UKPIA in 1999
helped achieve this

statistical review 2010

37
12. Service Station Crime

12. Service Station Crime

BOSS (British Oil Security Syndicate Ltd.) is an Developing procedures to ensure the safety of staff

independent trade organisation and forecourt crime and customers and to reduce operational losses are

campaigner dedicated to reducing criminal activity on the primary drivers. The major source of loss arises

service stations which cost the industry around £20 when motorists drive away without paying after taking

million in 2009. Its members are the oil companies BP, fuel (Drive Offs) and customers fail to return and pay

Shell, Chevron and Total, as well as members of the after claiming to have no means of payment with them.

Retail Motor Industry Federation – Petrol. BOSS works

BOSS collects statistical information from almost
closely with local police forces, the Home Office and
1,800 service stations supplied by its members and
forecourt owners and operators, representing about
the charts below show the quarterly incident rates
6,000 fuel station retailers in the UK who employ over
of different types of crime. The data is also used to
55,000 people.
estimate the industry loss each year.

Visit www.bossuk.org for more information

12.1 Crime Related 12.2 Types of Weapon

Injuries

Crime Related Injuries incidents per quarter per 100 sites Type of Weapon incidents per quarter per 100 sites
4 3
3

3
2
2

2
1
1

0 0
2001q4 2002 q4 2003 q4 2004 q4 2005 q4 2006 q4 2007 q4 2008 Q4 2009 q4 2001q4 2002 q4 2003 q4 2004 q4 2005 q4 2006 q4 2007 q4 2008 Q4 2009 q4
Major Other
Gun Knife Other

Source: BOSS Source: BOSS

• The previously rising trend in crime related injuries • The substantial reduction of reporting of incidents
has been largely reversed since 2003 involving weapons in 2008 was maintained in 2009
• Major injuries are reportable under RIDDOR
• The majority of reported injuries are suffered by staff

38
 12. Service Station Crime
12.3 Physical Violence 12.4 Burglary Losses
and Robbery

Physical Violence & Robbery incidents per quarter per 100 sites £ loss per quarter per 100 non 24 hr sites Burglary Losses
7 25000

6
20000
5
15000
4

3 10000

2 5000

1
0
0 2006 q2 2006 q4 2007 q2 2007 q4 2008 q2 2008 q4 2009 q2 2009 q4
2001q4 2002 q4 2003 q4 2004 q4 2005 q4 2006 q4 2007 q4 2008 q4 2009 q4

Physical violence Robbery

Source: BOSS Source: BOSS

• Robbery is theft with actual or threat of physical • Burglaries generally take place when service
violence stations are closed so the majority occur on
non-24 hour sites
• Physical violence increased in 2009 compared with
2008 and continues to be a cause of concern • The chart relates losses to non-24 hour sites
• Burglary losses exclude property damage
• Losses in 2009 fell substantially compared
with 2008

12.5 Drive-off and No 12.6 Estimated Injury

Means to Pay Losses Losses

Drive off & No Means to Pay Losses Loss per quarter £000 per 100 sites Estimated Industry Losses £million per year
100 35
90 30
80 25
70 20
60 15
50 10
40 5
30
0
20 2001 2002 2003 2004 2005 2006 2007 2008 2009
10
Drive Off No Means of Payment Other
0
2005 q1 2005 q3 2006 q1 2006 q3 2007 q1 2007 q3 2008 q1 2008 q3 2009 q1 2009 q3

Source: BOSS Source: BOSS

• Driving off without paying for fuel remains the major • Industry losses are estimated by extrapolating data
source of loss at fuel sites collected by BOSS
• Motorists who fill up with fuel but have no means to • ‘No means to pay’ losses were collected
pay and who do not clear the resulting debt constitute inconsistently prior to 2004
the second highest source of loss
• Losses exclude fraud, credit card losses, shop theft,
• The improvement in the second half of 2008 was property damage and consequential losses such as
assisted by falling fuel prices staff time following violent incidents
• The trend reversed in 2009 but reported losses
were lower than in previous years

statistical review 2010

39
UNITED KINGDOM
United Kingdom Petroleum Industry Association
Quality House, Quality Court,
Chancery Lane, London WC2A 1HP
Tel: 0207 269 7600
Email: info@ukpia.com
Website: www.ukpia.com