The consultation, launched as a call for input on potential cost-of-living tariff suspensions, covers a diverse range of products, from avocados, quinoa and couscous through to heating oil.
For the liquid fuels sector, the proposal could have more significant implications than the other items on the list might suggest.
At present, kerosene imported from third countries is subject to a 4% tariff – a pre-Brexit arrangement originally intended to support domestic refining.
However, the refining sector has changed considerably in recent years. Across Europe, capacity has reduced, while in the UK the number of operational refineries has fallen sharply. Recent closures, including Grangemouth and Lindsey, have further reduced domestic production capability for refined fuels, including kerosene.
Against this backdrop, industry trade body UKIFDA has argued that removing barriers to imports should be considered as part of wider efforts to strengthen supply security.
Stock levels falling
The timing of the consultation comes as refined fuel inventories across Europe remain under pressure. Data from the Amsterdam-Rotterdam-Antwerp (ARA) storage hub has shown continued declines in product stocks to multi-year lows, with jet fuel inventories among the most affected.
According to recent market data released by The Oil Market Journal, jet kerosene stocks in the ARA region stand almost 39% below year-ago levels and more than 43% below the five-year average.
As recent market volatility has demonstrated, disruptions impacting jet fuel markets rapidly influence heating oil pricing and availability, due to both products being kerosene-derivatives.
In its response to the consultation, UKIFDA welcomed the proposal and urged government to implement any relaxation as soon as possible and maintain it through the 2026/27 winter period.
CEO Ken Cronin comments: “Currently, the Strait of Hormuz continues to be inaccessible and even with an end to the conflict, the UK should plan ahead of winter for higher prices and fuel supply volatility.
“As a result, the UK should ensure every avenue is pursued to maintain kerosene supplies.”
Removing supply constraints
The tariff measure is seen as one that could improve market flexibility and reduce supply constraints. This will become increasingly important as the winter heating season approaches.
Industry data suggests heating oil demand during March and April was significantly below normal levels following the sharp price increases seen earlier this year, potentially indicating that volume has been deferred to later in the year.
As Ken notes: “With the bulk of annual heating oil sold between October and March, it is essential that all action is taken to widen availability of the fuel to balance supply and demand during this period.”
Noting that Europe previously relied on the Middle East for around 40% of its jet fuel, UKIFDA argues that tariff removal would help improve fuel availability at a time when global stocks remain under pressure.
Price movements will continue to be driven primarily by global market fundamentals. However, reducing barriers to imports could make it easier for suppliers to source product from a wider range of markets.
The consultation provides an opportunity for businesses across the fuel distribution sector to contribute evidence on the potential benefits and impacts of tariff suspension through the government’s consultation questionnaire.
For an industry accustomed to discussions around energy security, resilience and supply continuity, heating oil’s inclusion alongside avocados, green tea and couscous may appear unexpected.
Yet, for the millions of rural consumers and businesses that rely on the fuel, ensuring that every practical option is considered to support winter supply remains a serious issue.
Image from stock.