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Economic Development

'Things heading in right direction' for Stanlow oil refinery despite reports of 'imminent demise'

The firm owes the Government hundreds of millions of pounds in VAT

The Stanlow refinery in Ellesmere Port(Image: Essar Oil (º£½ÇÊÓÆµ))

An MP has said he "doesn't believe" the reports about the "imminent demise" of Essar's Stanlow oil refinery are warranted - and that "things are heading in the right direction" for the firm.

Justin Madders, MP for Ellesmere Port and Neston, has responded to reports the º£½ÇÊÓÆµ's second largest oil refinery could be close to collapse.

Essar, which owns the refinery providing around one sixth of the º£½ÇÊÓÆµ's road fuel, is in discussions with HM Revenue and Customs (HMRC) over a huge VAT payment that was delayed due to the Covid pandemic.

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Over the last 18 months, Essar Oil º£½ÇÊÓÆµ (EOº£½ÇÊÓÆµ), the firm owning the site, used the Government's VAT deferral scheme, with media reports suggesting the urgent talks over a £356m payment meant it was on the brink of collapse.

However, in a statement released at the weekend, a spokesman for Essar said it had already repaid HMRC £547m leaving a balance of £223m, as part of the Government opt-in scheme available to all corporates in the º£½ÇÊÓÆµ.

The firm admitted it is seeking a "short extension" to the 'Time to Pay' (TTP) agreement with HMRC after its recovery from the pandemic proved to be "slower than predicted".

However it said the discussion with the Government were "positive" - and that it "looks forward to a resolution soon".