ESSAR Oil UK says it "remains confident in its future", amid national press speculation the company – which has a refinery in Ellesmere Port – is on the brink of collapse.

Reports suggested the fuel giant, which supplies about a sixth of Britain's road fuel, was facing a deadline to repay hundreds of millions of pounds to HM Revenue & Customs in deferred taxes.

It added the firm, which employs more than 900 people at the Stanlow site, with a further 800 on-site contractors and 5,000 more through the extended value chain, was seeking an extension to the 'Time to Pay' agreement with HMRC.

Now Essar Oil UK has responded to what it calls 'press speculation', reaffirming that the trading environment is more positive, and that despite the concerns over potential fuel shortages across the UK, it had been able to deliver fuel to forecourts where necessary.

It acknowledged it was seeking "a short extension" with HMRC, as the recovery from the pandemic had been "slower than expected".

In a statement, it said: "EOUK [Essar Oil UK] set out in detail its current financial status in a statement last week, in which it confirmed the considerable progress the company had made to strengthen its financial position and agree new financing.

"As a result of that work over the past few months, EOUK has $1.1 billion in liquidity secured.

"Further, the company has now returned to EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortisation] positive and is therefore in a much stronger position to weather the continued challenge presented by the pandemic.

"Notably, EOUK has at this point successfully managed through the current supply disruption.

"By taking action in early August to retain its driver base, plus sign up smaller hauliers, EOUK has in fact increased vehicle shifts per day considerably, ensuring security of supply to its customers at this critical time.

"In early August EOUK was operating with about 52 vehicle shifts per day to over 70 shifts per day today. The shift plan is set to increase this further to well over 80 by the end of October according to current scheduling, bringing much-needed fuel to EOUK’s forecourt customers.

"EOUK remains committed to continuing to meet the demands of its customers."

The firm added it was continuing to discuss matters with HMRC.

"On future VAT payments, EOUK entered into a time-to-pay (“TTP”) arrangement with HMRC for a total of £770 million in April 2021.

"EOUK has already repaid HMRC £547 million, leaving a balance of £223 million, as part of the Government opt-in scheme available to all corporates in the UK.

"All companies under the TTP have been given until January 2022 to meet their commitments. EOUK had agreed to an accelerated schedule to make this payment.

"However, the recovery from the pandemic has been slower than predicted. EOUK is therefore in discussions with HMRC over a short extension to make those deferred VAT payments.

"Those discussions are positive and EOUK looks forward to a resolution soon.

"EOUK has made positive changes to its internal governance in recent months, having adjusted its board, constituted an Advisory Council, appointed a new independent director and has adopted the Wates principles.

"It continues to work with leading advisers, including E&Y. Since the refinery was acquired by Essar, Essar has invested more than $1 billion in the refinery and is committed to developing initiatives that support its vision for a low-carbon future.

"EOUK remains confident in its future, not least as the air travel market continues to open up and demand recovers."

Reacting to the national story about Essar, Justin Madders, MP for Ellesmere Port and Neston, said in a message on Twitter: “Having spoken with the company today (Sunday) I don’t believe the headlines about their imminent demise are warranted.

“Things are heading in the right direction and discussions have been positive with HMRC.”