29/03/2012 17:16:00

3rd UPDATE: UK Gasoline Sales Jump On Fuel-Strike Fears

--Rise in gasoline, diesel-fuel sales following strike threat

--Critics blame government for fueling panic buying at the pumps

--Automobile Association decries 'self-inflicted fuel crisis'

--Supply disruption at some gasoline stations

(Adds detail on disruption to gasoline stations, retailers comment, other information, in the third through fifth paragraphs.)

By Nicholas Winning and Jenny Gross

Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Sales of gasoline and diesel fuel have soared at petrol stations in the U.K. after the government recommended again Thursday that motorists top up their tanks to prepare for a possible strike by fuel-tanker drivers.

Although unions representing the disgruntled drivers haven't called a strike and must give seven days notice of a stoppage, the Retail Motor Industry Federation--a trade group representing some 5,500 independent filling stations--said sales of gasoline were 81% higher on Wednesday than on the same day last week while diesel-fuel sales jumped 43%.

The group, which represents almost two-thirds of gasoline stations across the U.K., said it couldn't confirm media reports that some forecourts had been forced to close after selling out of gasoline.

Tesco PLC (TSCO.LN, TSCDY), the country's largest retailer, said it had temporary supply issues at some of its 490 gasoline stations, while rival supermarket chain J Sainsbury PLC (SBRY.LN, JSAIY), which has 266 stations, said it was experiencing higher demand than usual for petrol and diesel fuel.

Critics have accused ministers of mismanaging the strike threat and fueling panic buying of gasoline, heaping more pressure on Prime Minister David Cameron after his government's budget last week was criticized for cutting taxes for the rich while increasing the tax burden on pensioners and popular cheap hot-baked foods.

Tanker drivers working for five of the U.K.'s seven major fuel-distribution companies voted Monday to strike over working conditions and health and safety practices, fueling fears of shortages and higher prices at the pumps. The drivers are represented by the Unite trade union.

On Wednesday, Cabinet Office Minister Francis Maude said people may want to store some petrol in a jerry can in their garages while Cameron said it would be sensible for drivers to top up their tanks if a stoppage looked likely.

Although trade groups, opposition and local media have blamed those comments for triggering an increase in demand for gasoline, Energy Minister Ed Davey said Thursday that drivers should get a full tank of gasoline at the pump rather than a half tank and top up where necessary.

Ministers have repeatedly said a strike would be wrong and would damage the economy and the government has said it is working on contingency measures to ensure fuel supply, such as training relief drivers from the military and maximizing storage. But although it has urged the two sides in the dispute to negotiate, the government's message has been overshadowed by its guidance for drivers.

Andrew Howard, a spokesman for the Automobile Association, said the country was on the verge of a "self-inflicted" fuel crisis, blaming rumors and misinformation for the buying frenzy.

"The advice you got about ordering jerry cans has led to localized shortages, queues and possibly profiteering at the pump," he said.

Keely Scanlan, a spokeswoman for the Retail Motor Industry Federation, said the comments by ministers were irresponsible.

Police in the south-western English county of Dorset said there was no disruption to the fuel supply in the U.K. and members of the public shouldn't panic buy. But it said it was requesting some gasoline stations to close temporarily due to queues.

Opposition Labour Party leader Ed Miliband said Cameron and Maude should apologize to the country for the way they have handled the issue.

"The Prime Minister is presiding over a shambles on petrol. The country is paying the price for the incompetent way he is governing," he said in a statement.

Chancellor of the Exchequer George Osborne defended the government's actions, saying it had a responsibility to make sensible contingency plans while the Unite union had a responsibility to call off the threat of the strike.

"The reason why people are concerned about fuel supplies is because we have a trade union that is threatening a strike that is potentially going to disrupt those fuel supplies," he said in a television interview.

The price of a liter of unleaded gasoline rose Wednesday to GBP1.409 up from GBP1.407 the previous day, and a liter of diesel fuel rose to GBP1.471 Wednesday, compared with GBP1.470 the previous day, the AA said. Gasoline and diesel-fuel prices have risen to record highs most days this month, and this slight price increase was in line with usual trends, it said.

Arbitration body ACAS, which has invited the fuel-distribution companies and Unite to talks, said it was collecting information from both sides which would form a basis for negotiations.

"We should conclude that process by Monday and would then hope substantive discussions would follow shortly afterwards," a spokesman for the group said in a statement.

-By Jenny Gross and Nicholas Winning, Dow Jones Newswires; 4420-7842-9239; jenny.gross@dowjones.com

(END) Dow Jones Newswires

March 29, 2012 14:16 ET (18:16 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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