Essar Oil UK (EOUK) has issued a statement rebutting press reports at the weekend that it was on the brink of collapse, and reiterating its financial stability.
It also reported that supplies to its customers continued unaffected, and all north-west petrol stations supplied by Essar were operating normally.
The press reports focused on a £223m VAT bill that was deferred last year due to the pandemic, which is currently the subject of discussions with HM Revenue & Customs (HMRC).
EOUK said it entered into a time-to-pay (TTP) arrangement with HMRC for a total of £770m in April 2021. EOUK has already repaid HMRC £547m leaving a balance of £223m, and the scheme gives them until January 2022 to meet its commitments.
EOUK said it had agreed to an accelerated schedule to make this payment, but as the recovery from the pandemic has been slower than predicted, EOUK is in discussions with HMRC over a short extension to make the deferred VAT payments.
The company reconfirmed it had $1.1bn in liquidity secured, up from $850m as at 25 May 2021. It added that it had now returned to EBITDA positive operations and was therefore in a much stronger position to weather the continued challenge presented by the pandemic.
Turning to the current supply disruption, it said that by taking action in early August to retain its driver base, and signing up smaller hauliers, EOUK has increased vehicle shifts per day considerably, ensuring security of supply to its customers.
In early August EOUK was operating with about 52 vehicle shifts per day and this had increased to more than 70 shifts per day, and the shift plan was set to increase this to well over 80 by the end of October according to current scheduling.