No state financial aid for refinery

The Government will not apply to the European Commission for permission to use state funds to prop up an oil refinery.

The Department for Energy and Climate Change made the decision regarding the Coryton oil refinery in Essex, where several hundred jobs are at risk after Coryton's parent company went into liquidation.

Unions and refinery supporters had pushed ministers to consider putting up cash to keep the refinery going until administrators can find a buyer as its closure would drain £100 million from the economy, but ministers said overcapacity in the refining industry meant it would not be sustainable to provide government help.

Unite previously called on ministers to follow the example of the French government and give state aid to keep Coryton running until a buyer could be found.

Thurrock council commissioned an economic impact assessment on the closure or change of use of the site, which found it would cost £30 million in wages, £26 million in contractor costs, £6 million in locally sourced materials, £40 million spent on chemicals and utilities, and £5 million in business rates.

A Government spokesman said: "It is extremely disappointing that the administrators haven't been able to find a buyer who could provide investment required to keep Coryton operating as a refinery.

"Departments across Government have looked very carefully at whether or not state aid should be provided for Coryton. But we have come to the conclusion that the existing overcapacity in the refining industry and declining demand for petrol mean that it would not be sustainable.

"This would not be a long-term solution either for the taxpayer or for the industry, which will thrive best with open and fair competition. If Government did step in to help Coryton, this would be a short-term fix, and it could potentially lead to job losses at other refineries who would be at an unfair disadvantage to Coryton.

"This was a very difficult decision and it is particularly regrettable that people may lose their jobs. We are working with local agencies and Jobcentre Plus to ensure the right support is in place if it's required to help these skilled workers find new positions.

"The closure of Coryton as a refinery should not have any impact on supply of fuel to London and the South East. There are many other supply points and operational refineries which can be used."

©Press Association