Essar Oil UK strikes phased tax payment deal with government

The deal with HMRC, which follows reports suggesting the company had overdue VAT payments, threatening the future of the refinery, will enable it to keep producing as fuel panic persists

Essar Oil UK (EOUK) has struck a phased tax payment deal with the government, which enables the company to keep producing as fuel panic persists in the country.

EOUK said it continued to run its Stanlow refinery to ensure adequate fuel supply to its customers across the UK throughout the pandemic, including the period when fuel demand was at very low levels.

Media headlines had suggested EOUK had overdue VAT payments, threatening the future of the refinery.

Britain recently saw drivers in long queues to fill their tanks and dozens of petrol stations closed, with fuel prices reaching record levels.

EOUK added it has reached out to its refinery customers and offered additional supply to ease fuel constraints, in light of the ongoing supply issues.

It has increased vehicle shifts per day, from around 52 in early August to more than 70 currently, which is expected to surpass 80 shifts per day by the end of October.

Road fuel sales volumes from its Stanlow, Northampton and Kingsbury terminals over the last weekend were up 22% against a “normal” weekend and on Friday, 24th September, sales volumes from the three terminals were up 14% on a “normal” Friday.

The phased payment schedule agreed with HM Revenue & Customs (HMRC) is aligned with EOUK’s revenues and the company is therefore confident of closing the last mile financings in the coming months, after having successfully raised $1.1 billion (£0.8bn) earlier this year.

Satish Vasooja, Chief Financial Officer of EOUK said: “I would like to thank HMRC for its support. With this time to pay arrangement, we now have significant runway to stabilise our balance sheet which has been adversely impacted by the pandemic.

“The improved environment around margins gives us the confidence to continue to serve as one of the UK key fuel suppliers with a 16% market share. We will also progress our future energy transition programme whilst also supporting a large proportion of the UK’s much needed fuel supply.”

Make sure you check out the latest Net Hero Podcast episode:

Latest Podcast