United Kingdom

Stanlow Oil Refinery chiefs 'hold crisis talks with HMRC over £223m VAT bill amid fears of collapse'

Britain's second biggest oil refinery is in crisis talks with tax officials amid fears it could be on the brink of collapse.

Bosses behind Stanlow Oil Refinery, in Ellesmere Port, Cheshire, are in urgent talks with HM Revenue and Customs (HMRC) over a £223million VAT payment.

The refinery, which has been under financial strain during the Covid pandemic, needs to start repaying the bill this week unless it can agree a new deal, according to the Sunday Times. 

Owned by the billionaire Ruia brothers, Shashi and Ravi, through their company Essar Oil UK, the refinery supplies about a sixth of Britain's road fuel. It is also supplies jet fuel for Manchester and Birmingham airports.

Around 900 people are employed directly at the refinery and around 800 contractors also work on site.

It also comes as Britain faces a fuel crisis, with the petrol stations having to shut and panic buying erupting after petrol chiefs announced they would have to close pumps as a knock on from the UK’s lorry driver shortage. 

Bosses behind Stanlow Oil refinery (pictured), in Ellesmere Port, Cheshire, are said to be in urgent talks with HM Revenue and Customs (HMRC) over a £223million VAT bill

Owned by the billionaire Ruia brothers, Shashi (pictured left) and Ravi (pictured right), through their company Essar Oil UK, the refinery supplies about a sixth of Britain's road fuel. It is also supplies jet fuel for Manchester and Birmingham airports.

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

The scheme, launched in March last year, allowed firms to defer VAT payments to help businesses stay afloat during the first Covid lockdown.

But businesses were ordered to either pay back the money by March 2021, join an interest free instalment scheme stretching to June, or make arrangements with HMRC to push back the payments.

Essar Oil UK is said to have taken advantage of the scheme, to the tune of £356million. 

It entered into a time-to-pay (“TTP”) arrangement with HMRC for a total of £770million in April 2021. 

Forecourt fury turns violent as drivers queuing to fill up exchange blows, while elsewhere motorists fill jerry cans and BP, Esso, Shell and Texaco limit drivers to £30 each 

Furious motorists were seen fighting as the nationwide rush for fuel continued yesterday, amid calls for calm from the Government because less than 100 petrol stations are empty.

Shocking footage showed panic buyers punching and kicking at each other during a violent brawl at an Esso petrol forecourt in Sidlesham, Chichester, as roads were left gridlocked and police had to be called in to marshal drivers.

Two men were seen grappling before throwing punches at one another, while another enraged motorist launched a flying kick at another man as the scramble for fuel turned violent in the sleepy West Sussex village.

Thousands of desperate drivers ignored Government pleas for calm as they jammed roads - with fears mounting over the impact of lasting fuel shortages on the economy.

Photographs yesterday online showing drivers stocking up on fuel. Just one per cent of Britain's petrol stations are empty, according to fuel bosses.

Some had multiple jerry cans in the boot of their cars and spent time filling each up while others queued for hours to reach the pump. Meanwhile, around 400 stations owned by the EG Group are limiting customers to £30 worth of petrol to give everyone a 'fair chance to refuel'.

Meanwhile, Boris Johnson revealed a visa U-turn for 5,000 foreign truck drivers to try to stem the shortage.

There are currently about 8,350 filling stations in the UK and less than 100 of them have been forced to close due to shortages. However, the Petrol Retailer's Association has warned the situation could get worse before it improves.

BP said around 20 of its 1,200 petrol forecourts were closed due to a lack of available fuel, with between 50 and 100 sites affected by the loss of at least one grade of fuel.

A 'small number' of Tesco refilling stations have also been impacted, said Esso owner ExxonMobil, which runs the sites. 

President of the AA Edmund King reiterated on Saturday there there 'is plenty of fuel at the source' and no need to stock up.

The company says it has paid back £547million leaving a balance of £223 million - which must be paid by January next year. 

Payments are due to begin this week. They are due to coincide with an end to the Government's suspension on winding-up petitions. 

However the company says the economic recovery has been 'slower than predicted' and it will therefore not make the payment and that it was in talks to 'modify that schedule'.

'Therefore EOUK in discussions with HMRC over a short extension to make those deferred VAT payments,' a spokesman told MailOnline.

'Those discussions are positive and EOUK looks forward to a resolution soon,' the spokesman added.

In a statement, EOUK said: '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.'

However, sources have reportedly told the Times that unless that refinery can find more cash that it will likely go into insolvency and be taken on by the Official Receiver to keep the refinery running.

A Government bailout already been ruled out, according to the Sunday Times. Ernst & Young Global Limited (EY) has also been brought in to advise the firm on what to do next, the paper adds.  

HMRC and EY have also been contacted for comment, but have not sent a response in time for publication.

It comes amid panic petrol panic following BP's decision to shut some of its stations due to supply chain issues impacting on getting fuel to pumps.

Meanwhile, more than 10,000 temporary foreign visas will be fast-tracked by the Government as ministers rush to solve the supply chain crisis that's threatening Christmas.

5,000 HGV drivers and 5,500 poultry workers will be given extraordinary three-month visas allowing them to work in the UK until Christmas Eve.

The move comes amid a nationwide panic-buying spree at petrol stations and growing fear inside Downing Street that supermarket shelves could remain barren until Christmas.

Transport Secretary Grant Shapps said the changes, with the visas available from next month, would 'ensure preparations remain on track' for the festive season.

But the Road Haulage Association warned the announcement 'barely scratches the surface', while the British Chambers of Commerce said the measures were the equivalent of 'throwing a thimble of water on a bonfire'.

Retailers had warned the Government that it had just 10 days to save Christmas from 'significant disruption' due to a shortfall of about 90,000 drivers in the freight sector.

It comes as thousands of desperate drivers ignored Government pleas for calm as they jammed roads - with fears mounting over the impact of lasting fuel shortages on the economy.

Furious motorists were seen fighting on Saturday as the nationwide rush for fuel continued amid calls for calm from the Government because less than 100 petrol stations were empty.

Shocking footage showed panic buyers punch and kick at each other during a violent brawl at an Esso petrol forecourt in Sidlesham, Chicester, as roads were left gridlocked and police had to be called in to marshal drivers.

Two men were seen grappling before throwing punches at one another, while another enraged motorist launched a flying kick at another man as the scramble for fuel turned violent in the sleepy West Sussex village.

5,000 HGV drivers and 5,500 poultry workers will be given extraordinary three-month visas allowing them to work in the UK until Christmas Eve

Transport Secretary Grant Shapps (above) said the changes, with the visas available from next month, would 'ensure preparations remain on track' for the festive season

A major shortage of HGV drivers threatens to wreak havoc this winter, and the shortage has been exacerbated by a huge backlog in HGV tests due to Covid

The shortage of HGV drivers has long threatened to wreak havoc this winter, and it has been exacerbated by a huge backlog in HGV tests due to Covid, as well as foreign drivers returning home amid the pandemic and Brexit. 

Industry groups the Food and Drink Federation and Logistics UK both welcomed the visa changes, with federation chief Ian Wright calling the measures 'pragmatic'.

But British Chamber of Commerce president Baroness McGregor-Smith said the changes were the 'equivalent of throwing a thimble of water on a bonfire', and that  the 5,000 new visas may be too little, too late to halt the chaos.    

Meanwhile, Marc Fels, director of the HGV Recruitment Centre, told BBC Breakfast the move was 'too little, too late'.

He said: 'Every additional driver that is coming into the sector at the moment is going to be of benefit.

'But I feel this is too little, because the numbers coming in, 5,000, is not going to make a very large dent on the 90,000-100,000 that we are perceived to be short.

'And too late because we have been understanding these problems have been coming as early as April this year, so we are moving into October and only now are the Government coming up with these solutions when this has been an issue since April.'

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