Fuel supply fears as refinery closes

Coryton refinery in Essex, which supplies 20 per cent of fuel in London and the south east, ended sales on Monday and told its 1,000 staff it was unsure when supplies would start again.

East of England MEP Richard Howitt said: “I don’t want to be alarmist about this, but I don’t want to be dishonest either. Supplies across London and the south east could be affected and I have been told this could impact the Olympics.”

But Charles Henry, the energy minister, told Channel 4 News the “right people who need to be involved, who understand the issues… are already involved”. He dismissed talk of panic-buying and price rises as premature and “well out of turn”.

Earlier today BP, a major customer, said it had no immediate supply issues but it was “watching the situation very closely”.

Under pressure

The refining business is under pressure because of the rising cost of crude oil, the economic downturn in Europe and competition from Asia.

Supplies across London and the south east could be affected and I have been told this could impact the Olympics. Richard Howitt MEP

The owner, Zurich-based Petroplus, said talks with lenders had broken down and it had appointed a receiver. Petroplus bought the site from BP for £714m in 2007. It has a capacity of 175,000 barrels of crude oil a day and produces petrol, diesel, aviation fuel and liquefied petroleum gas.

Petroplus made a loss of £265m in the first nine months of 2011, and in December the firm’s lenders withdrew £675m of its £1.3bn credit facilility.

Linda McCulloch, national officer at the Unite union, said: “One thousand jobs are at risk but we firmly believe that joint action by the owners and government can help secure the business.”

Euro MPs, including Mr Howitt, have been meeting to discuss ways to save jobs at Petroplus, which also has facilities in France, Germany, Belgium and Switzerland.

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Well-paid jobs

Mr Howitt told BBC Radio 5 Live the refinery was being dragged down by its parent company. He said half the jobs were well paid, highly skilled positions, while the other half were contractors, many of whom have already received their redundancy notices, adding: “One thousand job losses in Essex will have a devastating impact on the local economy.”

A Department of Energy and Climate Change spokesman said: “The refinery remains operational. We understand that a process is under way to put in place the necessary commercial arrangements to deliver product into the market.

“Companies have already made alternative arrangements to ensure adequate supply of products are available while these commercial arrangements are being put in place.”

The other main supplier for the south east and London is the Exxon Mobil refinery in Fawley, near Southampton.

There are six other refineries in the UK – at South Killingholme and Lindsey, both in North Lincolnshire; Grangemouth, near Falkirk; Stanlow in Cheshire; and Milford Haven and Pembroke, both in Pembrokeshire.