Can The UK Ever Be Free From Russian Diesel?
According to the Office for National Statistics (ONS), June 2022 was the first month that no fossil fuels were imported into the UK from Russia. This is the first time this has happened since the British Government began tracking fossil fuel imports in 2002. No oil, gas, or coal was taken, showing a remarkable drop from the £4.4 billion given to Russia for its fossil fuels exports in the year up to June 2022. This is especially impressive given the fact that fossil fuel prices remain high, and many EU countries are stockpiling fuel in response to the ban, which will come into force at the beginning of 2023 and has thus far had minimal impact on the amount of money coming into Russia from the sales of these fuels.
If you think the UK managing to kick its Russian fossil fuel habit almost 6 months earlier than required sounds too good to be true, you would be right to be cynical. As with anything related to global trade, on closer examination a much more complicated story appears. BEIS data showing fossil fuel imports in June show that there was actually 106 thousand tonnes of diesel imported from Russia to the UK in June 2022, which was 9% of the diesel imported for that month. This represents a fall of 50% from June 2021 showing a step in the right direction, but it is far from the zero that was reported by the ONS. So, who has made an error?
Technically no one, and the answer highlights why nothing but home grown energy is ever truly going to mean we can guarantee no Russian fuel is burnt in this country. Bloomberg reports that while the ONS data tells us which country we buy it from, the BEIS data tells us which country the oil originates from. Thus, the 106 thousand tonnes of diesel we imported in June may not have been bought directly from Russia, but it is where the oil originated. Indirect imports are nothing new, but it highlights the fact that this is a global market for energy and issues remain in making sure that no Russian fuel is burnt in the UK even after the phase-out has taken place at the end of the year.
Graphs using BEIS data
Even if we ensure no indirect exports occur, we cannot guarantee that the fuel has not helped to finance Russia. Due to the sanctions Russia has been selling its fuels at a discounted price which has seen its exports to a number of countries increase including to China, India, France, UAE and Saudi Arabia. In the case of Saudi Arabia, Reuters reports that in the period of April to June this year 647,000 tonnes of oil was imported from Russia compared with 320,000 tonnes for April to June 2021. This discounted fuel has then been used to power the country, and to free up the Saudi’s much more expensive, domestically produced fuel for export to other countries - often to countries hoping to avoid the Russian fuel enabling the sale. Saudi Arabia was our second largest supplier of diesel in June with 188 thousand tonnes coming from the country, according to the BEIS data. Our largest was Belgium who has also increased imports from Russia. There is no viable way to not fund Russia, while still exporting diesel from other countries.
Focusing on accelerating the transition to electric vehicles will allow us to significantly reduce our dependence on diesel imports. On UK roads there are 12 million diesel passenger cars, 4 million diesel vans, and 580,000 HGVs, accounting for roughly an equal share of the UK’s diesel. Although for new passenger vehicles the market has crashed, with only 10% of new cars being diesel in July, they still dominate van and HGV sales. However, accelerating the switch to EVs can have a dramatic effect in reducing the amount of diesel used, especially, if we focus on high mileage drivers, which diesel vehicles tend to be.
Even if we reduce Russian diesel imports to zero it will not stop Russian diesel going elsewhere. This global market where prices are being set by OPEC, leave families struggling to pay while record profits are made by a handful of countries and companies. Even if we increased our own diesel production, which we cannot as our crude oil is not suitable for our main refineries, we would still have to pay international prices. The only way to reduce our diesel import dependency is to accelerate the switch to electric, focusing on diesel vehicles as we use no diesel for electric generation. The scramble to avoid fossil fuel exports from Russia has highlighted that many countries rely on fuel imports to fuel their roads and economies, and the fragility of energy security this reliance produces. Moving away from this world market is a clear path out of this crisis, and one the UK must take.