UK’s Department of Energy and Climate Change (DECC) has launched a new consultation to review the oil stocking system in the country.
The government has invited industry professionals to voice opinions on whether the present obligation of oil stocking by suppliers is the best effective model or whether it needs an alternative system, such as the centralised stocking agency, which currently exists in other European Union (EU) member states.
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Responses will be taken up until 7 June 2013.
UK DECC secretary Edward Davey said the country has a resilient and responsive oil stocking system, which will meet international obligations and ensures energy security.
"We are launching this consultation to ensure our oil stocking system continues to follow best practice, remains fit for purpose and provides the foundation to a vibrant UK oil industry," Davey added.
The UK needs to maintain emergency oil stocks for use during an oil supply disruption, as it is a member state of the EU and the International Energy Agency (IEA).
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By GlobalDataUK Petroleum Industry Association (UKPIA) director general, Chris Hunt, said that UKPIA will support the formation of an independent stockholding agency, which will manage compulsory stock obligation (CSO).
An EU Member State has to hold 90 days of average net daily imports of oil stocks or 61 days of average daily inland consumption.
Members of the International Energy Agency (IEA) have to maintain about 90 days of net imports of oil reserves.
UK had stocks equal about 84 days of average consumption, according to the Energy Trends March 2013.
Companies need to supply 50,000t of oil to the UK market, while 2006 refiners are needed to hold 67.5 days of stock, while non-refiners are required to hold about 58 days of stock.
As part of the Oil Stocking Order 2012, obligated companies need to hold about 1/3 of their oil stocks, while UK’s CSO stock, currently held by obligated companies, is about 11,500,000t.
Image: UK Department of Energy and Climate Change secretary Edward Davey. Photo: Courtesy of Business, Innovation and Skills Office.
