Strikes at British Petroleum’s (BP) Europe’s largest refinery in the Netherlands are shutting down diesel production, which could exacerbate fuel shortages in the United States ahead of winter, according to Bloomberg.
Refinery strikers are refusing to fix a steam outage that is halting production and say they will not resume operations even if the problem is fully fixed, meaning BP’s refinery in Rotterdam, which can process 400,000 barrels of crude oil per day will remain closed, Bloomberg reported. Meanwhile, inventories of New England distillate fuel oil, which is refined into diesel and winter heating oil, are nearing their lowest levels, according to the Energy Information Administration (EIA). (RELATED: ‘Dizzying’: Americans Can Expect Record Gas Prices This Thanksgiving)
“We regret that the unions have decided to call a strike at the bp refinery in Rotterdam,” BP said in a statement to the Daily Caller News Foundation. “As a result, the planned restart of the refinery has been put on hold and operations remain halted.”
The Biden administration is also mulling a plan that would require oil companies to store a minimum amount of diesel in their fuel tanks, which could further increase fuel prices in areas like New England, according to Bloomberg. Diesel and fuel oil shortages are most pronounced in the northeastern United States, as the region has become dependent on imports of distillate fuel due to its limited pipeline capacity.
The United States has only 26 days of diesel left in its commercial inventory and a gallon of diesel costs about $1.58 more than it was in November 2021, according to the Energy Information Administration. The price of fuel oil, a fuel most commonly used in New England to heat homes, has also risen 65% since October 2021.
The administration could also deploy the Northeast’s 1 million barrel emergency fuel stockpile to deal with shortages in New England. However, with demand for diesel being so high, supplying the reserve would last less than six hours, according to the Washington Post.
Refinery workers began a partial strike on November 14 after BP rejected wage demands from their unions, according to Quantum Commodity Intelligence. The two unions, which represent 440 of the plant’s 730 workers, wanted a three-year stock match program worth 3.35% and a 6% wage increase retroactive to April 2022.
“We remain in dialogue with the unions to reach an agreement and minimize the consequences,” BP said.
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