Stanlow owners Essar Oil UK in talks with HMRC over £223 million in unpaid VAT


The brothers owning Britain’s second biggest oil gas refinery, Stanlow near Ellesmere Port in Cheshire, are in talks with UK tax authorities over an unpaid VAT bill, according to press reports.

Essar’s Stanlow Oil Refinery by By By Dennis Turner, CC BY-SA 2.0, Link

As Britain’s panicking motorists continued to ignore ministers’ pleas, queuing for non-scarce yet till undelivered petrol, the Guardian reports today that HMRC is in talks with Essar Oil UK, owners of the plant, which refines of around one-sixth of the country’s motor fuel.

Essar is owned by billionaire brothers Shashi and Ravi Ruia.  Per today’s Guardian, the firm was seeking an extension until January to pay the overdue VAT.

The company last year made use of the government’s VAT deferral scheme, introduced among measures shielding VAT-payers from the effects of cash flows crippled by the pandemic.

A total of £770 million in VAT was deferred, sources indicated, of which HMRC has received £547 million from the company.

Essar says it is in positive discussions with HMRC for a short extension to its “time-to-pay (TTP) arrangement” agreed earlier in 2021.

“All companies under the TTP have been given until January 2022 to meet their commitments. EOUK had agreed to an accelerated schedule to make this payment.

“However, the recovery from the pandemic has been slower than predicted,” the company said, adding that it hopes for a resolution soon.

Essar is being advised by accountants EY. It insisted on Saturday that it has made “considerable progress” to strengthen its financial position and agree new financing.

“As a result of that work over the past few months, EOUK has [£800m] in liquidity secured. Further, the company has now returned to EBITDA positive, and is therefore in a much stronger position to weather the continued challenge presented by the pandemic,” it said.

Since early August, the company has increased its daily vehicle shifts from 52 to more than 70, and is aiming to increase deliveries to more than 80 by the end of October, Essar said.

The statement came after Whitehall loosened competition regulations until Christmas, permitting oil distributors to exchange information and possibly to deliver fuel to rivals’ filling stations. Operation Escalin is the Department of Transport’s name for the emergency measures, which may yet see HGV-qualified military personnel drive commercial petrol bowsers.

The travails at Stanlow come in the wake of Grangemouth, Britain’s biggest refinery, unveiling a £1 billion plan last week, set to convert / boost it to hydrogen production.

Grangemouth’s owner INEOS intends investing at least £1 billion to make the Falkirk complex net zero by 2045.  The company claims to have slashed 37% off the site’s CO2e emissions since buying it in 2005.

INEOS has committed over £500 million spend on projects already approved or currently being implemented at Grangemouth.  Due for completion in late 2023, the complex’s new energy plant will supply energy to all site operations, driving emissions down by at least 150,000 tonnes per year.

The operator sees 2030 as an interim deadline for reducing 60% in the refinery’s greenhouse gas emissions.  By then, extended CCS should be harvesting 1 million tonnes per year of CO equivalent.  Construction of a “world-scale” CCS-enabled H2 production plant, will add to existing hydrogen extraction by other means.


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