Fawley oil refinery tight-lipped over risk of no-deal Brexit tariffs

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Fawley oil refinery
Fawley oil refinery seen from Southampton Water

FAWLEY oil refinery has remained tight-lipped over reports that changes to trade tariffs from a no-deal Brexit could harm the UK’s fuel industry.

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The ExxonMobil installation is the largest in the country and provides 20% of the country’s refinery capacity and employment for around 2,000 people.

A local government document leaked to the BBC has warned that two UK oil refineries could be forced to shut down if tariffs were imposed on British gasoline exports, making it harder to compete with facilities within the EU.

Fuel exports abroad could face a 4.7% charge if the UK leaves the EU without a deal and defaults to World Trade Organisation rules.

There is concern that gasoline imports into the UK, on the other hand, would benefit from a government decision to levy zero tariffs, to avoid price inflation, which must be applied across the board.

Industry analysts have reportedly said any refinery closures would probably not be permanent.

A spokesperson for Fawley oil refinery, which is run by ExxonMobil subsidiary Esso, would only say: “ExxonMobil has contingency plans in place to address any potential issues arising from Brexit.

“The details of these plans, related scenarios and our import and export markets are confidential and commercially sensitive.”

He did not respond to the A&T’s question about whether trade implications from a no-deal Brexit would affect proposals for a new £800m diesel plant, which refinery manager Simon Downing has said would create 1,000 construction jobs and protect the future of current roles.

Director-general for the UK Petroleum Industry Association, Stephen Marcos Jones, said it should be a government priority to create a “level playing field” for UK operations.

He said: “The UK downstream oil sector continues to make every preparation possible to cope with potential disruptions in the event of a ‘no-deal’ Brexit.

“UKPIA and our members are engaging with UK government to ensure that the long-term effects on the sector allow for a competitive and economically vital part of the UK’s fuel supply chain.

“Allowing UK refineries to compete on a level-playing field with EU refineries is a priority that government should address now in order to avoid and mitigate any potential upheaval from ‘no deal’.”

Fawley oil refinery processes around 270,000 barrels of crude oil a day. It handles around 2,000 ship movements and 22-million tonnes of crude oil and other products every year.

Other impacts of a no-deal Brexit could include lorries diverting away from Dover and causing pressure at Portsmouth. Hampshire County Council has warned that extra traffic and customs checks could lead to queues backing up on to the M27 and affecting the regional network.

On Tuesday the government announced an extra £9m for local authority preparations, including £5m to councils such as Portsmouth which are near major air, land and sea ports. It brings total Brexit readiness funding to £77m.

Local government secretary Robert Jenrick said: “From keeping our supply chains running and ensuring goods continue to flow into the country, to putting robust plans in place for every community, local government is playing a vital role in preparing the country to be fully ready to leave the EU on 31st October.”

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