One of Britain's last refineries runs out of oil
The Lindsey oil refinery, previously run by the Prax group, will be wound down imminently after the collapse of its parent company.
It has been in the hands of the Insolvency Service since the end of June and officials have been unable to find a buyer willing to take the whole site on. Around 400 workers have been told they will remain employed until October 31.
It is understood that staff who stay until that date have been promised a retention bonus, as they are needed to safely shut down the equipment.
After October, workers have been told that some will also be needed to remain for a further year to carry out decommissioning.
The end of refining at Lindsey, where roughly 10pc of the UK's fuel was produced before the recent crisis, has prompted warnings that Britain will be left more dependent on foreign imports.
Another refinery in Grangemouth, Scotland, closed earlier this year – with the remaining facility now only being used as an import terminal.
Earlier this week political leaders in Lincolnshire including Reform UK's Dame Andrea Jenkyns, the Mayor of Greater Lincolnshire, called for an urgent meeting with Ed Miliband on future options for the refinery.
They claimed Lindsey's closure, together with Grangemouth, would result in the loss of 25pc of the UK's refining capacity within a few months.
According to local media, Dame Andrea said: 'The refinery is not just a local employer – it is a national asset.
'Its closure would be a devastating blow to our communities and a reckless step backwards for the UK's energy resilience.
'We need urgent action from the Government to protect this vital infrastructure.'
The Government has dismissed the refinery's importance to national fuel supplies, arguing it is the smallest of the country's remaining facilities.
On Friday, a spokesman for the Department for Energy Security and Net Zero insisted UK fuel supplies were resilient.
However, it is understood that the Official Receiver will continue selling Lindsey's refined output for several more – allowing petrol stations and other buyers more time to adjust.
Michael Shanks, the energy minister, said: 'We are deeply disappointed with the untenable position in which the owners left Prax Lindsey Oil Refinery.
'As a result, after a thorough process to determine whether a sale was possible, no credible offers have been made to purchase the entire refinery and it will be winding down operations, while the Official Receiver continues to pursue interest in individual assets.
'Our sympathies are with the workers, their families and the local community.
'While we continue to strongly encourage the owners to do the decent thing and publicly commit to making a voluntary financial contribution to support workers, all those directly employed at the refinery are guaranteed jobs over the coming months.'
Unpaid tax bill worth £250m
The refinery, which employs more than 400 people, was previously part of the wider Prax Group, which includes some 200 petrol stations and oil and gas operations west of the Shetland Islands.
It supplied more than one tenth of the country's fuel supplies – including petrol, diesel, fuel oil, kerosene, aviation fuel and bitumen.
Prax, which is owned by the businessman Sanjeev Kumar Soosaipillai, purchased the facility from French oil giant Total in 2021.
However, the company had been experiencing cash-flow problems for more than a year, partly due to an unpaid tax bill thought to be worth £250m.
Mr Soosaipillai had been in talks with the Government since April about its situation, but Whitehall sources said he was unable to answer basic questions about Prax's finances.
Despite this, Prax is understood to have repeatedly assured officials that the refinery was not under immediate threat.
But that position suddenly changed when bosses revealed they were rushing to declare insolvency at the end of June, a move that blindsided ministers.
Mr Miliband has since ordered an investigation into the circumstances behind Prax's collapse.
Meanwhile, Mr Soosaipillai is facing legal action from administrators who are now in de facto control of the remaining Prax group, excluding the refinery.
According to refinery and Whitehall sources, his whereabouts are currently unknown and the Telegraph has been unable to contact him.
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