Essar Oil UK : Paying our tax

New Delhi: Essar Oil, owner of Britain’s secondbiggest oil refinery, on Wednesday said it is making timely payments of the deferred tax bill and will clear all outstanding by March 2022.

The company had used the UK government’s pandemic VAT deferral scheme in 2020, which allowed businesses to delay tax repayments. Of the reported GBP 223 million it owed, the firm owned by the Ruia family has paid roughly half of the amount by December 2021 and will clear the remaining by March.

“In September 2021, we confirmed a new time-topay (TTP) arrangement had been agreed with HM Revenue and Customs (HMRC), mainly in relation to March to June 2020 VAT.

“The company has successfully made all due payments in the three months to December 2021 and is on course to complete the balance in the quarter ending 31st March 2022,” it said in a statement.

The payment deferment, it said, was available to all corporates in the UK, due to the severe nature of the impact of COVID on businesses.

The Stanlow oil refinery supplies about a sixth of Britain’s transport fuel. The TTP arrangement provided for deferment of GBD 770 million of taxes payments. Of this, the company had previously paid GBP 574 million and GBP 223 million was due. Of the GBR 223 million, half has been cleared by December 2021.

Approximately 80 per cent of VAT deferred payments have been made in line with a schedule agreed with HMRC, the firm said.

Essar Oil UK operated Stanlow as normal during the recent fuel crisis in the country and supplied fuel to north-west petrol stations as normal.

The company said December 2021 saw the highest monthly volume of product sales for 18 months since the start of the pandemic and the EBITDA run rate is now at annualised USD 300 million level.

“In May and September, EOUK announced that it had closed new financial arrangements with liquidity from a diversified range of sources, aggregating USD 1.1 billion. Additional financing has been secured during the quarter ending December 31, 2021, with last-mile financing on the plan to complete in the next couple of months,” the statement said.

The company said the continued strength in demand and product margins is now leading to the generation of EBITDA at an annualised rate of approximately USD 300 mn.

“This is approaching the levels prior to the onset of the pandemic. Market analysts expect strong demand for refined products in coming years on the back of a recovery in economic activities globally,’’ it said. -(PTI)