UK Government Considers Support for Oil Refineries After Prax Lindsey Collapse

Ministers are exploring ways to provide state support to Britain's remaining oil refineries following the collapse of the Prax Lindsey site in Lincolnshire. This collapse has put hundreds of jobs at risk.

Ed Miliband, the energy security secretary, is looking into making refineries eligible for the Energy-Intensive Industries Compensation Scheme, which they are currently excluded from.

Energy costs were a key focus of the government's industrial strategy launched recently.

This move could offer financial assistance to the sector by helping with energy costs amidst various challenges. The appointment of compulsory liquidators over the Prax Lindsey refinery on Monday has exacerbated the situation.

The insolvency of the site, reported by Sky News, has been strongly criticized by the government. Energy minister Michael Shanks described the development as 'deeply concerning'.

The government is taking action to investigate the conduct of the directors and the circumstances surrounding the insolvency. Efforts are being made to ensure energy supplies are maintained, protect energy security, and support workers and the local community.

Prax Group, owned by Sanjeev Kumar Soosaipillai, is facing a crisis at the Lindsey refinery. The refinery has an annual production capacity of 5.4 million tonnes and processes various crude types.

The refinery, purchased from France's Total in 2020, has been a financial burden on the wider Prax Group. About 180 people work at State Oil Ltd, the parent entity, and approximately 440 are employed at the Prax Lindsey Refinery.

The rest of the group, including oilfield assets in the Shetland Islands and UK petrol stations, employs hundreds more people. These assets are not in administration but are expected to be sold as part of the group's reorganization.

According to the source: Sky News.