{"id":601,"date":"2014-03-19T13:40:10","date_gmt":"2014-03-19T13:40:10","guid":{"rendered":"http:\/\/www.valueoils.com\/blog\/?p=601"},"modified":"2014-03-19T13:40:10","modified_gmt":"2014-03-19T13:40:10","slug":"scottish-independence-affect-uk-heating-oil-prices","status":"publish","type":"post","link":"https:\/\/www.valueoils.com\/blog\/2014\/03\/19\/scottish-independence-affect-uk-heating-oil-prices\/","title":{"rendered":"Will Scottish Independence affect UK heating oil prices?"},"content":{"rendered":"

In March 2013, the Scottish Government announced that they would be holding a referendum to decide if Scotland should become an independent nation. The referendum is due to be held on 18th<\/sup> September 2014 and could have implications for the exchange rate, North Sea Oil and Gas reserves and the economy.\u00a0 As well as this, Scottish voters must also consider changes in taxes, pensions and savings.<\/p>\n

Scottish users of heating oil will be keen to know if they will see an increase in heating oil prices, if they vote yes, while users of oil throughout the UK will also want to keep a close eye on events in the chance that prices could be affected.\u00a0 If you are based in Northern Ireland, did you know that the main supply of heating oil into Northern Ireland comes from Scotland \u2013 the Petroineos Plant at Grangemouth. Read on for the key factors which could affect the price you pay to heat your home.<\/p>\n

Currency \/ Exchange Rate<\/h2>\n

Likelihood to effect UK Heating Oil Prices: 80%<\/h2>\n

As oil is traded in US Dollars ($), the exchange rate plays a big role in the price consumers pay for their heating oil. A bad day for GBP (\u00a3) can see the price of oil go up, while on a good day it can drive the price of oil down.\u00a0 Recently, the leading UK parties have ruled out a currency share, so if Scotland does vote \u2018Yes\u2019 for independence in the referendum, it is likely to have an impact on the GBP exchange rate vs. the Dollar and this in turn may affect the price that UK consumers pay for their heating oil.\u00a0 Whether or not it would have a long term impact remains to be seen \u2013 if Scotland does become independent, expect a reaction from the currency one way or the other.<\/p>\n

North Sea Oil and Gas<\/h2>\n

Likelihood to effect UK Heating Oil Prices: 40%<\/h3>\n

Outside of London, Aberdeen has the highest number of millionaires per capita in the UK, while unemployment is almost non-existent in the area. The reason for this is simple \u2013 North Sea oil and gas reserves.\u00a0 According to the BBC, \u201cfor 40 years, the industry has brought huge wealth to the UK, both in profits for the private sector and in taxes for public services\u201d. There are an estimated 24 billion barrels of oil remaining in the North Sea which the Scottish Government estimates would bring tax revenue of \u00a357B by 2018. Both governments are keen to show that their plans for the North Sea Oil reserves will best serve the population.<\/p>\n

However, generally, as oil is traded on the world market, and the UK being a Nett importer of crude oil, the likelihood of an independent Scotland having a major influence on UK heating oil prices remains fairly low.\u00a0 In March 2014, the crisis in the Ukraine \/ Crimea has not had a major influence on heating oil prices.<\/p>\n

UK Economy<\/h2>\n

Likelihood to effect UK Heating Oil Prices: 30%<\/h3>\n

<\/strong>With oil being traded on the world market, the focus is generally on news in the 2 big economies \u2013 the USA and China. The UK is currently 14th<\/sup> on the worldwide oil consumption list and this would likely fall if Scotland became independent.\u00a0 The likelihood of this affecting heating oil prices would remain fairly low.<\/p>\n

BP \/ Shell \/ Ineos Comments<\/h2>\n

Likelihood to effect UK Heating Oil Prices: 10%<\/h3>\n

While these companies will have relatively little impact on world oil prices, their comments are worth considering.\u00a0 Ineos, owner of the Grangemouth Refinery, who came into the news in autumn 2013 commented that \u201cGrangemouth will survive\u201d whatever way the vote goes. This is good news for the local economy, as up to 10,000 jobs rely on the plant and fuel users in general as Grangemouth supplies around 70% of fuel used at Scotland\u2019s filling stations.<\/p>\n

Both BP and Shell have a keen interest in Scotland and have invested heavily in the region. Both companies commented that they would prefer for Scotland to remain as part of the UK, as it reduces questions marks over their investments, currency and tax rates. However, both companies are used to dealing with volatile political environments and would be able to cope with a \u2018Yes\u2019 vote.<\/p>\n

Conclusion<\/h3>\n

After considering the factors above, it is likely that whatever way the Scottish public vote in September, oil prices will be slightly affected.\u00a0 Whether or not there will be a lasting effect remains to be seen. The good news for heating oil users is that prices are currently down around 15% vs March 2013. It may be a good idea to fill up over the summer to avoid any volatility in prices after September \u2013 though a word of warning \u2013 prices were lower during winter 2013 than they were in the summer.\u00a0 We can\u2019t be sure what will happen with prices, but one thing we can guarantee is that ValueOils.com will be priced at the sharp end of the market.<\/p>\n

By Andrew Higgins<\/p>\n","protected":false},"excerpt":{"rendered":"

In March 2013, the Scottish Government announced that they would be holding a referendum to decide if Scotland should become an independent nation. The referendum is due to be held on 18th September 2014 and could have implications for the exchange rate, North Sea Oil and Gas reserves and the economy.\u00a0 As well as this, Scottish voters must also consider changes in taxes, pensions and savings. Sco… Read more<\/a><\/span><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3,4,5,9],"tags":[],"_links":{"self":[{"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/posts\/601"}],"collection":[{"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/comments?post=601"}],"version-history":[{"count":0,"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/posts\/601\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/media?parent=601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/categories?post=601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valueoils.com\/blog\/wp-json\/wp\/v2\/tags?post=601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}