Brexit could double the cost of trading oil
4th May 2017 | Commercial Energy
Industry body Oil and Gas UK has written to Prime Minister Theresa May, urging her to minimise any “Brexit burden”. This is after new research revealed that the cost of oil trading following the UK’s exit from Europe could double to £1.1 billion. Oil and Gas UK said around £73bn of oil and gas-related trade (both fuel and non-fuel) flowed between UK and the rest of the world. Around £61bn of this related to traded goods, which could be subject to tariffs. Services account for the remaining £12bn of the total.
It is said that under the “status quo” scenario with the UK still a member of the EU, the total cost of this trade was around £600 million a year – less than two per cent of the total value of trade that is subject to tariffs.
In a worst-case scenario post-Brexit – where the UK reverts to World Trade Organisation (WTO) rules with the EU and rest of the world – the research showed the likely cost would double.
However, it added that if the UK was able to negotiate minimal tariffs with the EU and improved tariffs with the rest of the world, the cost of trade could fall by around £100m a year to £500m.
The study also showed that of those people directly employed by the oil and gas industry, the vast majority (90 per cent) are UK nationals, five per cent are EU workers from countries other than the UK and a similar percentage are non-EU. Around 70 per cent of the EU workers within the industry are skilled, with half of them holding managerial roles.
Oil and Gas UK said it understands that these skilled roles which are filled by EU workers are often critical for various projects, and it is asking the Government to consider these jobs when developing a domestic immigration policy.
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