Fuel Crisis Report final and conclusion...

Financial and Banking Sectors

Limited information exists concerning the impact of the fuel protests on banking and financial services. The sector was dependent on the transportation industry for the movement of money and financial notes.

Disruptions to the transportation sector during other incidents have affected the ability of banks to supply automatic teller machines (ATM) with cash, resulting in ATM service outages. However, the banks stated that there were no serious interruptions in daily operations. They did not have to resort to any drastic action after securing a place on the government's priority fuel list for the armoured vehicles, which transport money around Britain.

Industry Sectors

As expected, British businesses were severely affected by the lack of fuel and reduced transportation. Negative impacts included disruptions in the transportation of staff and consumers, and, again, the just-in-time shipment of supplies, parts and finished products due to interconnectivity, and reliance on business partners for services.

The London Chamber of Commerce estimated that 10 percent of the economy's daily output was being disrupted by the protests. Industry leaders noted that large parts of the economy, including steel and motor manufacturers, faced the threat of shutdowns, cutbacks and closures had the fuel crisis lasted any longer. Car manufacturers were within a week of shutdown by the time supplies started flowing again. Defence and aerospace industries were also within a week of "serious problems," and steel makers had been on the brink of a 40 percent reduction in output. Some companies started reducing the size and scope of their operations.

The London Chamber of Commerce warned the crisis was costing British business $250 million a day.

Government Sector Postal services were gradually reduced over the course of the protests. The Royal Mail reported serious delays, and it was warned that its postal deliveries were being "seriously threatened". Guaranteed next day delivery was suspended, and a plan that prioritized deliveries was implemented to ensure that social security payments were not disrupted.

PREVENTIVE MEASURES IMPLEMENTED

The British government set up a ministerial task force, headed by then UK Home Secretary, Jack Straw, to examine the practical lessons learned from the week-long fuel crisis and to decide what emergency preparedness measures were necessary to safeguard the country's fuel supplies in the future.

The task force was also made up of senior oil industry figures, top police officers and ministers. Jack Straw said: "This situation has not arisen before. One of the complexities that we have learned is of the internal management structure of the oil companies..." Mr. Straw also noted that it was about "public order, public safety and, above all, ensuring a free flow of petrol into our economy and our society". As result of the task force work, the Memorandum of Understanding was signed on September 29, 2000 by four cabinet ministers of the Scottish and Welsh assemblies, the Trades Union Congress (TUC), the Association of Chief Police Officers, the five major oil companies and several major truck companies.

It was anticipated that this arrangement would support maintaining continuity of oil supplies to all customers and minimize the risk of disruptions in the event of future blockades. The memorandum, drawn by the government's fuel supply task force, committed members to work together to secure normal supplies of oil. Details as to exactly what action the police and government might undertake to keep the tankers moving in the event of future protests were kept secret for security reasons.

The key elements of the task force plan, which were made public, included:

- joint early-warning systems to alert authorities of the threat of protests,

- coordinated contingency plans in case of attempts to disrupt supplies,

- joint crisis management systems, and

- action to prevent the potential for, and allegations of, intimidation of tanker drivers.

Jack Straw stated the plan could not guarantee that Britain's fuel pumps would not run dry again, but added that it would at least reduce the risk. He further mentioned: "It is not possible to eliminate all risk to oil supplies. Our aim has been a practical one of reducing the risk. The idea of the memorandum of understanding to ensure that every signatory - the oil companies, central government, the devolved administrations, the police, the trade unions - is involved in taking the necessary contingency action against possible future disruption".

The fuel taskforce also made recommendations to protect food depots, major roads and to look after other potential targets other than oil depots in case of potential public rally. Health services and fire stations have been advised to keep on-site fuel stocks. Designated gas stations have been assigned for key staff members, and alternative arrangements have been made for railways. The supermarkets have also taken additional measures to maintain delivery schedules and to keep shelves stocked.

CONCLUSION

The fuel price protests in the United Kingdom in September 2000 revealed how everyday life could be affected by disruptions of fuel supplies. As dramatic as they were, the events of September 2000 acted as a catalyst for further development and implementation of robust and collaborative mechanisms to create mitigation strategies to deal with uncovered points of vulnerability in the UK fuel and other associated CI sectors.

In turn, the British fuel crisis of 2000 emphasized the importance of understanding the interdependencies between the fuel energy sector and other CI sectors. It became apparent that the reliance of the transportation sector on the fuel supply industry increased a degree of the debilitating effect of fuel supply deficiency on other CI sectors. Thus, the failure in the related sector triggered an direct impact on a number of other CI sectors due to their dependence on transportation. The September 2000 fuel protests also illustrated the vulnerability of CI sectors, resulting from a lack of flexibility inherent in existing production and distribution networks, not only in the energy CI sector but also transportation, food supply and health services.

ENDS