The Lindsey oil refinery in Lincolnshire is set to shut down after efforts to secure a buyer failed, following the sudden collapse of its owner, Prax Group, and the disappearance of its millionaire owners, Sanjeev and Arani Soosaipillai.
Around 625 workers have been told that redundancies are now inevitable, as the Official Receiver begins winding down operations. The closure will also affect Prax’s parent company, State Oil, leaving local communities and regional fuel supply chains under strain.
The situation escalated last month when the refinery fell into administration with £250 million owed to HMRC. Officials have been unable to locate the Soosaipillais, who reportedly paid themselves a £3.7 million dividend the year before the collapse, despite the company posting $30 million in losses.
Energy Minister Michael Shanks condemned the owners, saying:
“We are deeply disappointed with the untenable position in which the owners left Prax Lindsey oil refinery,”
and urged them to “do the decent thing” and support displaced workers financially.
Unite’s general secretary Sharon Graham called the refinery “critical national infrastructure” and demanded urgent government intervention to delay closure and secure a long-term future for the site.
The plant, which supplied 10% of the UK’s fuel, also provided jet fuel to Heathrow. While the airport is reportedly unaffected, local fuel shortages have hit forecourts in Lincolnshire.
The collapse follows broader pressures on UK refining, including the shutdown of Grangemouth in Scotland earlier this year due to high energy costs and uncertainty around North Sea oil policies.
Energy Secretary Ed Miliband has called for a full investigation into Prax’s collapse and the conduct of its directors.
