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CO2, Fuel & Gas Shortage 2021: Effects for Businesses & How to Prepare

Oct 6, 2021

The UK currently finds itself facing several different shortages due to a variety of reasons. The key ones being reported in the media are CO2, gas, and fuel – here we look at the causes of these three key shortages. We also explore what this could mean for businesses and how to prepare your business to withstand any negative impacts of shortages.

CO2, gas, and fuel shortages UK

Fuel shortages

Whilst it has been stated that there is not a shortage of fuel itself in the UK, what there is, is a shortage of fuel tanker drivers which had slowed the supply of fuel to petrol stations. Coupled with panic buying, this has created a situation which has seen long queues at petrol stations up and down the country with many people not able to get fuel for their essential trips. The situation is reportedly easing and it is expected that the army will be assisting in the transportation of fuel from this week in a bid to get the fuel supply chains back up and running.

Gas shortages

This BBC article takes an in depth look at the causes of the gas shortages which have been widely reported in the media.

  • A cold winter across the world, increasing demand for gas and depleting supplies
  • A delay to replenishing gas stocks as a result of maintenance postponed by many gas producer’s during COVID lockdowns
  • A fall in electricity generated by wind power due to calmer weather conditions

As a result, wholesale prices of gas have risen significantly and seen several UK energy suppliers go bust. It is expected that many of us will see higher energy bills this winter.

CO2 shortages

The rise in wholesale gas prices globally has also had an impact on CO2 production in the UK and across Europe. It has resulted in two large fertiliser plants in Teesside and Cheshire, who produce CO2 as a by-product, closing.

CO2 is used by many areas of the food industry in particular

  • The meat industry
  • Keeping food fresh in transportation
  • Packaging – extending shelf life by preventing bacteria e.g., meat, fresh foods, baked goods
  • In drinks e.g., Carbonated water, fizzy drinks, beer

It is thought that the CO2 shortage could hit food supplies, as well as having a detrimental impact on meat producers.

What impact are the shortages having on UK businesses?

The shortages are wide ranging and could therefore impact your business in a variety of ways depending on the industry you operate in. But some of the areas in which you may face challenges include:

  • Supply chain delays and breakdowns
  • Increasing business costs – higher gas and fuel prices
  • Inability to fulfil customer needs – e.g., lack of fuel limiting your ability to deliver goods ordered
  • Staff shortages as a knock-on impact of the fuel shortage
  • A return to increased home working if staff are unable to get fuel for their journeys to the office

How can your business prepare for the impact of shortages?

Obviously, these shortages were not expected and come at a difficult time for businesses still recovering from the impact of COVID-19 lockdowns and related challenges.

Supply chains have been stretched for a while and will only be exacerbated by the issues addressed above.

A keyway to ensure that your business is in the best possible way to respond should shortages or supply chain issues impact you is to have a robust business continuity plan in place. This should map out ways you will respond to business challenges, for example:

At Anthony Jones we focus on the areas of risk management with all our clients and work in partnership with Cardinus, a global risk and safety partner, to support our focus in this area.  We can work with you to understand your business and attitude to risk and business resilience and identify insurance covers which can offer protection. Get in touch with us on 020 8290 9080 or email us at business@anthonyjones.com to discuss any of your business insurance requirements.

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