Fuel distributors are used to change. Prices move, winters disappoint, supply tightens, governments change course and margins come under pressure. Good operators adapt.
What feels different now is the number of structural pressures arriving together – across markets, infrastructure, technology, policy, customer behaviour and the wider economy. Increasingly, those pressures amplify one another.
Geopolitical shocks can raise wholesale prices, affecting household affordability and buying patterns. High energy costs can increase political pressure for intervention while leaving customers less able or willing to invest in alternative technologies. Extreme weather can disrupt infrastructure and supply chains. Policy influences where capital is invested, affecting which technologies reach scale and at what cost.
For a distributor planning fleet investment, depot capacity, recruitment or the future shape of the business, separating one issue from another is becoming increasingly difficult.
That is the starting point for this new Fuel Oil News series.
You asked us to help navigate change
Through conversations with distributors, one request comes through consistently: help us understand what all this means for our businesses.
Not just what the latest policy announcement says or which technology has launched, but where the market is heading and how businesses can remain profitable as it evolves.
That is what Navigating the Energy Transition willaim to do.
We will not assume there is one technology, fuel or business model that every distributor should pursue. Nor treat the energy transition as something separate to the day-to-day job of running a fuel business.
Instead, we will examine the forces already changing that job and consider the opportunities they create.
From disruption to structural change
Recent events have demonstrated how quickly geopolitics can affect the price and availability of liquid fuels. The UK supply landscape has altered through refinery and terminal closures, and labour, vehicle, insurance and compliance costs have increased.
Technology is changing route planning, customer communication, tank monitoring and business data use.
At the same time, energy policy is increasingly designed to reduce fossil-fuel consumption and carbon emissions.
That does not mean demand for liquid fuel disappears tomorrow. Liquid fuels continue to be embedded in essential parts of the economy and maintaining secure, reliable supply remains vital.
The CMA’s July 2026 market reports around 1.5 million UK households still rely on heating oil. In Northern Ireland it is the primary heating method for almost two thirds of households according to the latest NISRA survey.
The Government’s UK Food Security Report states that agricultural energy “remains heavily reliant on non-renewables” with 98% of commercial farms in England using red diesel according to the latest Defra survey.
The longer-term direction, however, is becoming harder to ignore.
Government energy projections generally anticipate declining demand for conventional oil products as transport electrifies at pace, buildings become more energy efficient and lower-carbon alternatives take a greater share of energy demand.
Government projections anticipate a substantial long-term decline in conventional oil demand, led principally by changes in transport.
Under DESNZ’s central reference scenario, final oil demand is around 46% lower by 2050 than in 2024, excluding international aviation. The direction of travel is not the same in every market. Road fuels are likely to face the greatest structural pressure as vehicles electrify and renewable fuels take a larger share. Domestic heating oil has already experienced a gradual long-term decline, although annual demand remains highly sensitive to weather and prices. Agricultural demand may prove more persistent where practical alternatives to liquid fuels remain limited, and renewable-fuel substitution may alter the product mix without reducing total liquid-fuel volumes to the same extent.
For distributors, the direction of travel changes the commercial question.
Some businesses may continue to grow their volumes by increasing market share or through consolidation, even if the overall market contracts. Certain customer segments may also prove more resilient than others.
Increasingly, however, business performance may depend as much onmargin, efficiency, customer retention, service, diversification and the value created from each customer relationship as it does on litres sold.
It is growth measured in value, not only volume.
A changing customer conversation
Price and reliability remain fundamental. They always will. But distributors increasingly encounter questions that would have been much less common a decade ago.
What alternatives are available? What is HVO? Will my next vehicle be electric? Should I replace my oil boiler? What will heating cost in five years? What is the carbon impact of the fuel I buy? What government support may be available?
Not every customer is asking these questions, nor is every customer ready or able to change. But even before they do, those questions begin to change what they expect from their supplier.
Distributors have considerable strengths here: established customer relationships, delivery networks, local knowledge and, particularly in rural communities, trust built over decades.
That creates both an opportunity and a strategic question.
If customers’ energy needs change, how much of that future relationship can the existing distributor retain?
The answer will differ between businesses. For some, it may involve renewable liquid fuels. Others may add lubricants, tank services, telemetry, EV charging, heating technologies or broader energy advice. Some may focus on becoming exceptionally efficient operators in a reduced but enduring liquid-fuel market.
There is no reason to assume one model will suit all. But there is every reason to understand the options before decisions become urgent.
Policy is now a commercial force
Whatever an individual’s view of net zero, the policies associated with it – and their commercial impact – cannot be separated from business planning.
Behind much of that policy direction is the need to reduce greenhouse-gas emissions, while the physical effects of a warming climate are themselves becoming a business and infrastructure risk.
Policy affects taxation, fuel standards, vehicle choices, heating incentives, infrastructure investment and the relative economics of competing technologies.
It can create markets, constrain others and change before long-life investments have paid back.
That uncertainty matters when businesses are considering assets with working lives measured in decades rather than years.
A tanker purchased today may pass through more than one chassis or refurbishment cycle, while storage tanks and depot infrastructure can remain in service for 20 or 30 years – and in some cases considerably longer. NWF, for example, accounts for commercial vehicles over three to ten years, plant and machinery over three to 25 years and buildings over ten to 50 years.
For businesses making capital decisions today, assumptions about demand, regulation and the fuels those assets may need to handle in the 2030s and 2040s are therefore already relevant.
The relevant question is therefore not simply “what is the policy today?”
It is also “what assumptions about demand, customers and regulation am I building into this investment?”
Good decisions do not require perfect certainty. They require an understanding of where the uncertainty lies, how much exposure it creates and what options remain if circumstances change.
The strategic question may be less “will I still need this asset?” and more “how flexible is this investment if the product mix changes during its working life?”
When pressures collide
These changes do not operate independently.
War or political instability can disrupt supply and raise prices. Higher prices place pressure on household budgets and business costs. Governments may respond through changes to taxes, subsidies or policy timetables. Those decisions influence investor confidence, which affects future infrastructure and technology availability. Extreme weather can add pressure to supply chains, insurance, agriculture and energy demand.
These compounding pressures are sometimes described as a polycrisis: not simply several difficult events occurring at once, but stresses in different systems interacting in ways that can intensify their effects.
For a fuel distributor, their combined effect is seen in very practical ways: a different ex-rack price, a smaller customer order, another enquiry about HVO or heat pumps, a higher insurance premium, a disrupted delivery route or an investment decision that suddenly feels harder to make.
Understanding those connections matters because planning for each risk separately could underplay their combined effect.
No single transition
It is tempting to talk about the energy transition as though one system will simply replace another.
In practice, the transition is fragmented and uneven.
Electricity is expected to take a much larger role as heat, transport and industry electrify, but deployment does not follow a straight line. Heat-pump installations have risen substantially since 2020, though recent figures show this is not linear. Even as a small proportion of the current fleet, zero-emission vehicles are rapidly gaining ground. Renewable liquid fuels are already in use, and the SAF Mandate creates a legally defined growth path for sustainable aviation fuel. Hydrogen and carbon capture remain at an earlier stage, with government-backed projects moving into operation and construction.
These pathways are not progressing at the same speed nor facing the same constraints. Policy support, investment, construction, deployment and commercial maturity are different things. Economics, infrastructure, resource availability and customer demand will determine where each technology can scale.
For distributors, that means the future is unlikely to involve waiting for one technology to win and then changing direction overnight.
It is more likely to involve a prolonged period in which old and new systems coexist.
That may complicate planning, but it also creates room for businesses that can adapt without abandoning the capabilities on which they were built.
Five questions for your business
Rather than trying to predict one version of the future, distributors can begin by testing the assumptions behind their current business model.
- Margin: Where do we create value beyond the litre – and will customers pay for it?
- Demand: Which customer segments could contract first, and which are likely to remain resilient?
- Assets: What assumptions about demand, regulation and product mix underpin our next investment?
- Customers: Which changing energy needs could we credibly continue to serve?
- Resilience: Which combination of price, weather, supply and policy changes would put the greatest pressure on our business?
Navigating what comes next
Conversations about the transition can rapidly become an argument about who is right. That is not the purpose of this series.
The operating environment is changing whether individual businesses welcome every aspect of that change or not. Our purpose is to examine what it means commercially.
Over the coming issues, we will examine what distributors really think about the transition; how climate, geopolitics, affordability and energy security are reshaping markets; which proposed solutions can scale; what lower conventional-fuel demand could mean for growth; and how businesses are already adapting.
There will be uncertainty, contradictions and trade-offs. We will consider those too.
The objective is not to predict one version of the future. It is to give fuel distributors the information and context they need to make better decisions in the business they run today, while preparing for the market in which they may operate tomorrow.
Next: What does the industry really think?
We ask fuel distributors how they view net zero, future fuels and the changing energy market – and where they see the greatest risks and opportunities.
Image credit: Dreamstime
