The government has been urged to step in to ensure continuation of fuel supply from Petroplus’ oil refinery in Coryton, Essex, which supplies 20% of the UK’s road fuels.
While administrators PriceWaterhouseCoopers arranged for deliveries from the refinery to be resumed albeit at less than 50% capacity it is understood two ships were at anchor in the Thames Estuary awaiting payment for their cargo of crude oil, as Forecourt Trader went to press.
Brian Madderson, chairman of RMI Petrol, said: "The Southeast has over 2,000 petrol filling stations and accounts for 25% of total demand so it is vital that no disruption is caused to businesses and consumers in the engine room of our economy, and government has a responsibility to ensure the continuance of supply."
"It is good news that road tankers are on the move again from the refinery, however this may only provide a short-term solution," added Madderson. "This is a wake-up call for the UK’s energy resilience and we will be looking to government to take the lead. How financially secure is the former Shell refinery at Stanlow in Cheshire? The new owner, Essar, has seen its share price collapse on the London stock market from 550p to 127p. We might be heading for a second ’Petroplus’ in Cheshire."
While some retailers in the London area have reported slightly higher volume throughputs of 5-10%, there has yet to be any shortages of fuel on forecourts or reports of consumers panic buying. But, as predicted by Madderson, wholesale fuel prices have been adversely affected.
"Wholesale prices for diesel have risen by 0.8ppl and petrol by 1.2ppl since last weekend (January 22) and with 20% VAT added, average UK prices at the pump are also rising," he warned. "We could see diesel over the 143.04ppl record high of May 2011 by the end of January.
"There is pressure on wholesale prices due to the developing EU embargo on Iranian crude oil shipments. The Coryton setback now just adds further pressure to an already difficult market."
Meanwhile. following a meeting at the Department of Energy and Climate Change in Central London on January 26, Energy Minister Charles Hendry promised that the government was in full support of the plan of action to secure the long-term future of Coryton.
"There was agreement that the best way to secure the sustainable future of the plant is to maintain current operations and to find a buyer as quickly as possible," he said. "I made clear that the government will do all it can to support this process."
The troubled oil refiner Petroplus, Europe’s largest independent oil refiner, announced it was to file for insolvency on January 24, following a failure to reach agreement with creditors to extend loan repayment deadlines. Fuel deliveries stopped from the Coryton refinery for two days.
During the weeks prior to the closure, Petroplus had been negotiating with its lenders to reopen credit lines which were frozen in December. In addition, the company had been seeking to arrange alternative financing and liquidity facilities, as well as other strategic options.
Jean-Paul Vettier, Petroplus CEO, said: "We have worked hard to avoid this outcome, but were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit and refining markets."