The UK Refined Fuels Market is projected to register a strong CAGR during the forecast period (2026-2031).
UK freight, aviation, and industrial life continue to be fueled by refined fuels with diesel and jet fuel accounting for most of the transport energy needs. The shift in demand towards middle distillates due to the maintenance of diesel and jet fuel consumption by road freight and aviation recovery. Domestic refining capacity is becoming constrained with a number of the legacy refineries experiencing cost pressure, carbon compliance issues and falling gasoline demand. In 2024, the UK still had approximately 1.2 million barrels/day of refinery capacity, although the pressure to rationalize is intensifying on the old-age sites.
The production of crude oil in UK has been decreasing and has an average of about 794,000 barrels per day (b/d) in 2023, and consumption has been very high, resulting in the need to import crude oil.
The policies on energy transition are hastening the process of low-carbon fuel replacement, which compels refiners to reorganize the assets to biofuels and terminal conversion. Strategic significance is growing due to the declining domestic production that is intensifying dependence on the imported diesel and aviation fuels.
Logistics and Freight Resilience: Continued demand of diesel in the heavy-goods vehicle (HGV) sector is keeping the main refining gantries in the UK busy. There were 2.8 million fewer diesel vehicles on UK roads in 2024 compared to 2019, with a 0.9 million increase in Light Goods Vehicles (LGVs) being more than offset by a sharp fall of 3.7 million diesel cars.
Aviation Hub Recovery: The soaring demand of jet fuel in the major UK airports is pushing refiners to extract as much aviation turbine fuel as they can inside the wider carbon constraints. The SAF Mandate starts in 2025 at 2% of total UK jet fuel demand, increasing linearly to 10% in 2030 and then to 22% in 2040.
Energy Security Prioritization: Geopolitical instability is already fueling a domestic-first approach to the purchase of vital transport fuels in order to reduce dependence on unstable international spot markets.
Strategic Infrastructure Investment: The Future of the UK Downstream Oil Sector project by the government is already subsidizing the implementation of low-carbon technologies in current refinery locations.
ZEV Mandate Pressures: Phase out of internal combustion engine (ICE) vehicles is starting to permanently put downward pressure on retail gasoline demand.
High Operational Capital Expenditure: UK refining assets are getting older and the amount of maintenance expenditure being incurred is steadily increasing in order to meet the changing safety and environmental licensing requirements.
SAF Production Transition: The new SAF Mandate is providing a big opportunity to refineries to shift production to renewable avtur and development fuels.
Carbon Border Adjustment Mechanism (CBAM): Advocacy for the inclusion of refining in the UK CBAM is currently targeting a level playing field against high-carbon fuel imports.
The UK supply chain is transitioning from a decentralized manufacturing model to a centralized, import-heavy distribution system. Logistics providers are currently reconfiguring the "Midline" and "GPSS" pipeline networks to facilitate the movement of finished fuels from coastal import hubs to inland demand centers. The closure of northern refining assets is necessitating a more robust rail and road tanker network to serve the Scottish and Northern English markets. This supply chain is becoming increasingly digitalized, with operators using real-time dispatch data to manage the tight inventory levels resulting from reduced domestic production.
Agency/Body | Regulation/Mandate | Market Impact |
|---|---|---|
Department for Transport (DfT) | RTFO 2026 Compliance | Limits crop-derived biofuels to 3% and enforces a rising low-carbon fuel obligation. |
DESNZ | Future of Downstream Oil | A 2026 call for evidence seeking to define the long-term role of refineries in the energy transition. |
UK Government | SAF Mandate (2025) | Establishes a standalone obligation for aviation fuel suppliers to include renewable content. |
February 2026: Carbon Neutral Fuels (CNF), a leading UK-based developer of sustainable e-fuels, announced the selection of Johnson Matthey (JM) and bp’s FT CANS™ technology and Honeywell UOP’s Fischer-Tropsch (FT) Unicracking process technology for its flagship Power-to-Liquid efuels facility in Workington, U.K.
January 2026: Phillips 66 Limited successfully acquired the assets of Prax Lindsey Oil Refinery following its liquidation, consolidating regional refining capacity in Lincolnshire.
By Product Type
The product mix is currently dominated by middle distillates as the UK economy relies on diesel for its primary logistics and commercial transport. Gasoline demand is witnessing a structural decline as the passenger vehicle fleet transitions toward electrification under the ZEV mandate. Jet fuel is experiencing a sustained growth phase, with refineries reconfiguring units to meet the 2025 SAF Mandate requirements. This production shift is ensuring that the remaining UK refineries focus on the most "difficult-to-electrify" segments of the transport economy.
By Refining Complexity
Capital is concentrating in high-complexity hubs like Stanlow and Fawley, which are currently being retrofitted for the energy transition. These sites are integrating low-carbon hydrogen production to reduce the carbon intensity of their refining processes. Low-complexity refineries are facing obsolescence as the cost of compliance with the UK's environmental standards outpaces their refining margins. The resulting market is becoming a "fortress" of highly efficient, deeply integrated complexes that can handle a variety of global feedstocks while meeting the 2026 RTFO standards.
By End-Use
Transportation end-use is currently bifurcating between retail consumers adopting EVs and commercial sectors maintaining a dependency on refined liquids. The industrial end-use segment is increasing its demand for petrochemical feedstocks as UK manufacturing seeks to modernize its supply chains. Residential heating oil demand is remaining resilient in off-grid areas, though federal policy is currently incentivizing a long-term move toward heat pumps. This end-use profile is requiring refiners to optimize their "gantry" dispatch systems for high-frequency, smaller-batch deliveries to a wider airport and retail network.
Demand is currently shifting toward the North-West and South-East clusters, where the remaining domestic refining capacity is located. The North-West (Stanlow) is currently establishing itself as a leading low-carbon energy hub, serving ten major airports and over 150 retail forecourts. In contrast, Scotland is now functioning as an import-dependent market following the 2025 transition of its only refinery into a terminal. The South-East remains anchored by the Fawley complex, which continues to serve as a critical link for the London and Atlantic Basin fuel markets. This regional reconfiguration is necessitating a major upgrade of the UK's strategic fuel reserves to mitigate the risks of localized supply shocks.
BP Europa SE
Shell Deutschland GmbH
TotalEnergies Deutschland
Esso Deutschland GmbH (ExxonMobil)
OMV Deutschland GmbH
PCK Raffinerie GmbH
Holborn Europa Raffinerie GmbH
Essar Energy Transition (EET)
EET is already the most active participant in the UK transition, with intentions to invest $3 billion in the low-carbon in the next five years. The company is retaining its strategic differentiation by making Stanlow a hydrogen-first refinery, which recorded record sales in 2025. It aims to have a long-term future with SAF production and integration of carbon capture.
Phillips 66 Limited
Phillips 66 is also making a strategic purchase of the Lindsey refinery assets in 2026 which will then form a powerhouse in refining cluster in the region of Humber. The company is in the process of streamlining its supply chain in order to capitalize on the synergy between the Humber and Lindsey location. This growth is enabling Phillips 66 to control the supply of fuel in the East Coast of the UK.
ExxonMobil
ExxonMobil is maintaining its position as a cornerstone of UK fuel security through its massive Fawley refinery and petrochemical complex. The company is currently integrating advanced digitalization to improve energy efficiency and reduce Scope 1 emissions. Its strategy remains focused on supplying high-purity fuels and chemicals to the premium South-East market.
The refining industry in the UK is now undergoing its most radical five-year stretch with the shrinkage in the number of physical locations being offset by colossal technological investment in the remaining centres. Whether or not refiners can scale SAF and hydrogen fast enough to keep up with a natural decline of the fossil fuel market is determining success through 2031.
| Report Metric | Details |
|---|---|
| Forecast Unit | USD Billion |
| Growth Rate | Ask for a sample |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | Product Type, Refining Complexity, End Use |
| Companies |
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