LONDON (Reuters) - The cost of Britain’s oil and gas trade with the rest of the world could nearly double if the country fails to agree new tariffs when it leaves the European Union, the country’s oil lobby group has warned Prime Minister Theresa May.
The head of Oil and Gas UK told May in a letter seen by Reuters that yearly oil trade costs could rise to 1.1 billion pounds ($1.4 billion), from around 600 million pounds now, if Britain reverts to World Trade Organization rules after Brexit.
May, whose government is negotiating the terms of Britain’s exit from the EU, has said not reaching an agreement with the bloc would be better than signing a bad deal, leaving open the possibility of reverting to default WTO rules from March 2019.
“Our request of government is that any change, whether domestic or European, is managed in a manner that minimises risk to the oil and gas industry,” Oil and Gas UK Chief Executive Deirdre Michie wrote in the letter dated May 1.
Michie also said her association’s research showed that if Britain agreed minimal tariffs with EU member states and improved terms with other countries, trade costs could fall by around 100 million pounds a year.
Britain’s oil and gas trade with the world is worth about 73 billion pounds a year.
Michie called for “frictionless access” to the EU’s labor market as around 5 percent of Britain’s oil and gas workforce are non-British EU nationals, many of whom fill roles the association deems critical.
Reporting by Karolin Schaps; Editing by Dale Hudson