Brexit Could Nearly Double Oil and Gas Trade Costs
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The trade body for the UK oil and gas industry is urging Prime Minister Theresa May to minimize any Brexit burden after new study revealed that the cost of oil trading following the UK’s exit from Europe could double to around £1.1bn per year.
Oil & Gas UK commissioned a study, considering the possible cost of trade for the industry and illustrating where the UK sector’s workforce comes from.
The trade body says that the country could reduce the trade costs by about £100m per year through negotiations with the European Union (EU) on minimal tariffs and with the rest of the world on improved tariffs.
Around £73bn of oil and gas-related trade (both fuel and non-fuel) flowed between the UK and the rest of world, and about £61bn of which related to traded goods, which could be subject to tariffs. Services account for the remaining £12bn of the total.
Oil & Gas UK CEO Deirdre Michie said: “While the trade body can’t take a position on Brexit, we commissioned the research because we need to understand the possible impact on our industry — and the possible opportunities — from exiting the EU.
“We also identified other EU policy issues as critical to the oil and gas industry and will require negotiation with European counterparts, as well as discussions at the domestic level between Government, regulators and industry during the Brexit process.”
Michie concluded that the trade body’s request to the government is that it should minimize risk to the oil and gas industry by managing any impact caused by change on the domestic or European front post Brexit.
Oil & Gas UK has recommended the government to ensure smooth access to markets and labor post Brexit, and give protection to energy trading and the internal energy market.
It also wants the 5 percent of EU workers employed in the UK industry in mostly critical roles of projects to be considered by the government when developing its domestic immigration policy.
Source: (May 4, 2017) Energy Business Review
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