by
Autonet Insurance
| Jan 24, 2012
Motorists may be faced with fuel shortages and price increases at the pump after a refinery have announced they will be filing for bankruptcy.
The Croydon refinery supplies around 20% of fuel in the region of the South East and 10% of the UK’s overall supply. They have today announced they will be halting supplies causing motorists to wonder where their fuel will come from and it has since been revealed that the refinery was in critical trouble and the Government needed to be aware.
The refinery is one of eight in the UK which produces petrol, diesel and other clean fuels and also imports fuel from other countries.
Reasoning behind the file for bankruptcy comes down to the owners Petroplus who have failed to reach an agreement with creditors to extend deadlines for loan repayments therefore bankruptcy is their only option.
The Department of Energy and Climate Change spokesman said: "The refinery remains operational.
"We understand that a process is under way to put in place the necessary commercial arrangements to deliver product into the market.
"Companies have already made alternative arrangements to ensure adequate supply of products are available while these commercial arrangements are being put in place."
Experts have warned motorists who are in the South of England not to panic buy fuel which could cause problems for the rest of the UK, as most filling stations would run out quickly sparking a petrol crisis.
Along with the fuel crisis around 1,000 jobs are under threat by the refinery’s financial issues with the last sighting of employees early this morning. This will cause a major problem for the economy given the current problems surrounding employment issues.
National officer Linda McCulloch said: “One thousand jobs are at risk but we firmly believe that joint action by the owners and Government can help secure the business.
“We are in constant dialogue with Petroplus and their Swiss owners, and the UK Government, we are stressing to the workers that their interests are our absolute priority.
“It is vital that these negotiations are conducted in an atmosphere of calm to allow the best buyer to be found for the site.”
The file for bankruptcy looks like it will take place costing people jobs in the South and cause a potential fuel crisis for the UK.
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By Amanda Bainbridge