By BEN WINKLEY
LONDON -- An
influential body of UK lawmakers said Friday it will open
an inquiry into the challenges facing the country's oil-refining industry, to see if recent
closures threaten security of supply.
The Energy and Climate Change Committee, which is appointed
by parliament to examine government expenditure, administration
and policy, said it was seeking evidence on what needs to be
done to maintain a suitable baseline level of refining capacity.
The UK had 18 oil refineries in the late 1970s, but it has
just seven in 2013.
The most recent to close, in 2012, was Coryton, one of the
largest and most modern facilities in Europe that supplied
10% of the UK's fuel market. It was the second to shutter in
the UK since the economic crisis hit in 2008.
Increased competition from ultra-modern refineries in Asia
and the Middle East, and increasingly stringent environmental
standards, are adversely affecting UK refineries, the committee
Europe's economic woes are also playing their part, reducing
demand for fuels such as diesel and gasoline. This combination
of factors led to the insolvency of Swiss-based Petroplus,
which owned Coryton.
Also, a continued spell of high crude prices has meant that
refineries across Europe have struggled to make a profit. This
week a French court ordered the liquidation of the
Petit-Couronne refinery, which was part of
Petroplus's stable, after rejecting two bids to take over the
facility on the grounds that they didn't have the requisite
The Energy and Climate Change Committee is seeking written
evidence by May 20 on the reasons for UK refinery closures, the impact of
domestic and European Union regulation on the industry and what
mix of products is likely to be required in the future.
The committee is also seeking opinion on what factors will
determine the future viability of the UK refining industry, the
effect of closures on the country's energy security and what
steps the government could take to maintain an appropriate
level of refining capacity.
A spokeswoman for UKPIA, the industry group that represents
the interests of the UK's refiners, described the decision to
investigate the challenges facing the industry as "a very
"The industry is going through a very difficult time," the
spokeswoman said. "This is an important opportunity for us to
get our voice heard."
Dow Jones Newswires