Great Britain

UK’s second-biggest oil refinery faces collapse as company holds crisis talk with HMRC over £223million VAT bill

BRITAIN'S second-biggest oil refinery could be on the brink of collapse.

Bosses of the Stanlow Oil Refinery in Ellesmere Port, Cheshire are in crisis talks with HMRC over a £223million VAT payment.

The refinery has to start paying its tax bill this week unless it can agree to a deal, the Sunday Times reported.

Stanlow Oil Refinery has been under financial strain during the Covid pandemic.

It's owned by billionaire brothers Shashi and Ravi Ruia, who control it through their company Essar Oil UK.

The refinery supplies around a sixth of Britain's road petrol as well as supplying jet fuel for Birmingham and Manchester airports.

Around 900 people are staff members at the refinery while there are 800 contractors also working on site.

The refinery built up a VAT bill under the Government's VAT deferral scheme during the pandemic.

The scheme allowed businesses to defer their VAT payments to help them survive during the first lockdown.

Essar Oil UK reportedly paid back £547m of a £770m arrangement they made as part of the scheme.

This means the company still needs to pay £223m by January, with payments due to begin this week.

The company said the economic recovery has been "slower than predicted" and therefore it won't be able to make its expected payment.

An Essar Oil spokesman told MailOnline: "Therefore EOUK in discussions with HMRC over a short extension to make those deferred VAT payments.

"Those discussions are positive and EOUK looks forward to a resolution soon."

The company also said in a statement: "EOUK has made positive changes to its internal governance in recent months, having adjusted its board, constituted an Advisory Council, appointed a new independent director and has adopted the Wates principles. 

"It continues to work with leading advisers, including E&Y. Since the refinery was acquired by Essar, Essar has invested more than $1 billion in the refinery and is committed to developing initiatives that support its vision for a low-carbon future.'

"EOUK remains confident in its future, not least as the air travel market continues to open up and demand recovers."

Sources told The Times that unless the refinery can repay its tax bill then it will likely go into insolvency and have to be taken on by the Official Receiver.

A government bailout has been ruled out, according to The Times.


It comes as chaos has erupted at petrol pumps with panic buyers rushing to buy fuel amid a shortage caused by a lack of lorry drivers.

Cops have been forced to jump a queue in order to get vital fuel while an ambulance has crashed into traffic waiting for petrol while rushing to an emergency.

Cops had to jump ahead of queues at a petrol station in Hackney, London in order to avoid running out of petrol.

Meanwhile video showed an ambulance trying to make its way through a line of cars waiting for petrol at a Shell station in Bromley, Greater London.

With its sirens blaring, the ambulance driver manages to slowly move the vehicle through the queue.

However, as the ambulance driver tries to squeeze it past the queue the vehicle hits the back of one of the cars.

The paramedic then had to stop and swap details with the other driver before rushing to the emergency.

It comes after a brawl erupted at an Esso fuel station, said to be between two dads and their sons, amid petrol shortage fears.

The four men traded blows during a shocking fight in the forecourt of the petrol station in Chichester, West Sussex, on Friday night.

The president of the AA Edmund King assured Brits there is "plenty of fuel at the source" and no need to panic buy, with a lack of lorry drivers being blamed for disruption to fuel supplies.

Ambulance crashes into cars queuing for petrol as paramedic tries to weave through traffic while rushing to emergency

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