Petrol stations run dry after oil refinery collapse
A financial crisis at the Lindsey Oil Refinery, owned by Prax Group, has unleashed chaos across a string of forecourts near the plant in Lincolnshire, some of which have been unable to secure any supplies for more than a week.
The supply crunch has been triggered by a halt in fuel deliveries from the site, which was taken over by the Official Receiver after Prax collapsed.
This has left many local petrol stations in disarray as they battle to source more expensive alternatives to remain open, leading to unexpected financial losses.
Tom Dant, managing director at Gill Marsh forecourts in Lincolnshire, said his three garages were without fuel for at least eight days in the wake of Prax's failure.
'It is a complete mess,' he said. 'The communication has been less than poor. We can't get anything from the refinery. They have no tankers or drivers, which means there is no way that they can supply us.'
Mr Dant remains locked into a five-year supply contract despite Prax's failure, preventing him from sourcing a new fuel partner.
This means he has to rely on more expensive short-term supplies, which he said have already cost him £50,000 in lost profits.
Bullwinkle's Garage, another nearby forecourt in Lincolnshire, is also facing similar problems. A spokesman for the business said they went five days without any petrol because of the collapse.
Prax collapse
Both petrol station businesses said they were blindsided by the company's failure, echoing complaints made by Ed Miliband, the Energy Secretary, earlier this month.
At the time, Whitehall officials said they were repeatedly assured that the refinery was not under immediate threat.
However, Mr Dant questioned why ministers were not aware of the problems at Prax sooner.
It comes after The Telegraph revealed that the company had been battling cash flow problems for more than a year owing to a £250m tax liability with HMRC.
It is understood that Prax had approached the Government for support in 2024, although their request was denied.
Signs of financial stress had also emerged at the company earlier this year when Prax started pulling direct debits from customers days earlier than planned.
'For us, how has it reached the point that the Government let them run an £250m unpaid tax, and it had not been probed before now?' said Mr Dant.
Mr Miliband has since ordered a full investigation into the circumstances behind Prax's collapse, including 'the conduct of the directors'.
This is likely to raise questions over why the owners of the refinery, Sanjeev Kumar and Arani Soosaipillai, were paid a £3.6m dividend the year before it collapsed.
The Telegraph revealed last week that authorities are currently unclear as to the whereabouts of Mr Soosaipillai, who is the chief executive of Prax.
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