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Essar Oil (UK) Limited (EOUK) confirms it has entered into a new time to pay agreement with HM Revenue & Customs (HMRC). EOUK and HMRC have agreed a phased payment schedule, aligned with EOUK revenues. EOUK is therefore confident of closing the last mile financings in the coming months after having successfully raised USD$1.1 billion earlier in the year.
Throughout the pandemic, including during the period that fuel demand was at very low levels, EOUK continued to run its Stanlow refinery, instead of shutting it down, to ensure adequate fuel supply to its customers across the UK. More recently, though aviation volumes remain low, the road fuels market has started to return to more normal levels and as a result, EOUK turned EBITDA positive in early summer.
More recently, in light of the on-going supply issues, EOUK has reached out to its refinery customers and offered additional supply to ease the recent fuel constraints. EOUK has successfully increased vehicle shifts per day, from c.52 vehicle shifts per day in early August to over 70 today. This is expected to surpass 80 shifts by the end of October.
Road fuel sales volumes from EOUK’s Stanlow, Northampton and Kingsbury terminals over the last weekend (25—26 September) were up 22% against a “normal” weekend (pre-Covid). On Friday 24 September sales volumes from the three terminals were up 14% on a “normal” Friday.
Satish Vasooja, Chief Financial Officer of EOUK said:
“I would like to thank HMRC for its support. With this time to pay arrangement, we now have significant runway to stabilise our balance sheet which has been adversely impacted by the pandemic. The improved environment around margins gives us the confidence to continue to serve as one of the UK key fuel suppliers with a 16% market share. We will also progress our future energy transition programme whilst also supporting a large proportion of the UK’s much needed fuel supply.”