Britain became a net importer of oil for the first in more than a decade in July, as imports of crude hit their highest level on record, government figures showed yesterday.
In the latest portent of the end of the era of North Sea oil, the UK imported £61m – or 410,000 tonnes – more oil than it exported. Its £694m import bill was an all-time record.
The reversal contributed to a total import bill of £20.8bn, the largest since records 300 years ago, which sent the UK’s trade deficit ballooning from £3.4bn to almost £3.7bn, the Office for National Statistics said.
The ONS reported a similar finding for June last month, but yesterday said that shortfall had been revised away. However, it said the figures pointed towards a trend of rising deficits. The oil surplus has fallen from £6.5bn four years ago to £4.1bn in 2003 and on current trends is on track to go below £2bn this year.
The pound fell to a six-month low of 68.37p against the euro. Analysts said an end to UK oil exports could hit sterling’s long-term value. “The UK is losing its status as a petro-currency,” said Douglas McWilliams, chief executive of the Centre for Economics and Business Research, which forecasts the euro rising to 81p by 2008.
The Association for the Study of Peak Oil said that the Government’s own figures showed North Sea oil output, which began in 1975, would be “more or less over” by 2020.
Geoffrey Dicks, Royal Bank of Scotland’s chief UK economist, said: “Since an oil surplus is something we are going to have to live without, we need to start compensating for diminishing oil output by improving the non-oil account. But there is not much sign of that happening yet, as the deficit excluding oil looks like getting to £60bn this year against £51bn last year.”
