The ministers explore ways to give state support to the remaining oil refineries of Great Britain while they are jostling to meet the fallout of the Prax Lindsey site in Lincolnshire which threw a shadow on hundreds of jobs.
Sky News understands that Ed Miliband, the Energy Security Secretary, wishes to design a mechanism for refineries to become eligible for the energy -intensity industry remuneration program – from which they are currently excluded.
Energy costs were at the heart of the government’s industrial strategy launched last week.
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Such a decision would give a welcome financial increase in the sector by helping them with energy costs in the middle of a series of challenges that led to the appointment of compulsory liquidators on the Prax Lindsey refinery on Monday.
The site insolvency – Revealed by Sky News – aroused strong criticism from the government, the Minister of Energy Michael Shanks qualifying the development of “deep worrying”.
“There have been long-standing problems with this company and the workers have been seriously disappointed,” he said.
“The Secretary of State now writes to the insolvency to demand an immediate investigation into the conduct of the administrators and the circumstances surrounding this insolvency.
“The government will ensure that supplies are maintained, protect our energy security and do everything we can to support workers and the local community, in particular by engaging with unions and industry organizations.
“The company has left the government very shortly to act.”
Prax Group belongs to Sanjeev Kumar Soosaipillai, who also acts as president and chief executive officer and is the only director of the refining subsidiary.
Workers are seen in the Lindsey refinery. File peak: Prax group
The Lindsey refinery crisis, which is located on a 500-kilometer site from the Humber estuary, echoes the number of oil refineries in Great Britain.
According to the company, the site has an annual production capacity of 5.4 million tonnes, dealing with more than 20 different types of crude, including petrol, diesel, bitumen, oil and aviation fuels.
The refinery, which was bought in total of France in 2020, would have become a growing drain in cash through the larger Prax group, with which it has crossed guarantors.
About 180 people work at State Oil LTD, the Prax Group’s parent entity, while 440 others are used in the Prax Lindsey refinery.
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The rest of the group, which includes oil assets in the Shetland Islands and hundreds of British service stations, employs hundreds of people.
The other assets are not in administration themselves but should be sold as part of the group’s reorganization.