Taxpayers on the hook for at least £1bn after Lindsey oil refinery closure
British taxpayers could be forced to pay up more than £1bn following the collapse of the Lindsey oil refinery in North Lincolnshire last week.
Sources told the Times HMRC is owed unpaid taxes of around £250m, while the facility’s decomissioning costs could run from anywhere between £700m and £3bn.
At least 420 jobs were put at risk on Sunday after the owner of the Lindsey refinery, Prax Group, filed for insolvency.
Ministers have pledged to provide “short-term funding” to cover the operating costs of the facility as a sale process and potential wind-down gets underway.
It is understood government officials were made aware of the Lindsey refinery’s issues in April, yet Prax had insisted until last week there was no risk of closure.
One source told the Times: “Private administrators don’t want to take on the responsibilities associated with the refinery, which may have to be shut down in a managed process. The wind-down and the complexity of it means it could be very costly, potentially.”
Cost of Lindsey closure at least £1bn
Another said: “The cost of decommissioning is something that I hate to imagine, unless they can find a buyer. You’ve got all the pipelines on the site and the infrastructure: there’s no way it will be less than £1bn.”
Earlier this week, energy minister Michael Shanks said that the “final operating cost” would depend on market conditions and the “strategy adopted by the official receiver.”
“Together, these contingent liabilities are necessary to provide the official receiver and special manager with the necessary tools to fulfil their duties in a beneficial way for creditors and taxpayers.
“If the liability is called, provision for any payment will be sought through the normal supply procedure. The Treasury has approved the proposal in principle.”
The government has been approached for comment.