Wales politics

No-deal Brexit would make Valero oil investment 'harder'

Stephen Crabb
Image caption Stephen Crabb said uneven tariff arrangements were the "number one issue" for Valero

A no-deal Brexit would make it harder for Valero to increase investment in its Pembrokeshire oil refinery, a local MP has warned.

More than 500 people are employed at its Pembroke plant as well as hundreds of contractors.

UK government papers outlining no-deal Brexit preparations suggested no-deal could lead to the closure of two of the UK's six major oil refineries.

The UK government said it did not comment on leaks.

But Prime Minister Boris Johnson has insisted preparations for a no-deal Brexit are on track.

The papers, leaked to The Sunday Times, said 2,000 jobs could be lost and there could be subsequent industrial action.

Stephen Crabb, MP for Preseli Pembrokeshire, told BBC Wales: "Valero have been very clear with me, firstly they are here in Pembrokeshire for the long-term.

"They've got a successful track record of investing heavily to maintain Valero as one of the UK's largest and most competitive oil refineries.

"They've also been very clear with me and to government directly about the negative implications of a no-deal Brexit."

If the UK leaves the EU without a deal, UK petrol exports to the EU would be subject to tariffs.

However the UK government does not plan to introduce tariffs on petrol imports. This could lead to "significant financial losses", according to the leaked documents.

Image copyright Philip Halling/Geograph
Image caption The Milford Haven waterway in Pembrokeshire is home to petro-chemical firms, including Valero

Mr Crabb, who voted to remain in the EU, said the uneven tariff arrangements were the "number one issue" for Valero and they would "jeopardise" the company's trade with Ireland.

"It would make their annual task of arguing for ongoing capital investment from their US owners more difficult," he said.

"They are not suggesting in any way that a no-deal Brexit would mean the end of Valero in Pembrokeshire but clearly it would increase the challenges of operating successfully in the UK at a time when UK oil refineries need all the help they can get to compete internationally."

Mr Crabb added that he had written to International Trade Secretary Elizabeth Truss to "urge a rethink" on the proposed tariffs so that "a level playing field" can be maintained for UK oil refineries.

Ed Tomp, general manager of the refinery, said it had been making preparations to ensure it continued to "operate safely and reliably regardless of whether the UK leaves the European Union on October 31".

"However we are concerned that 0% import tariffs on petrol could create an unfair advantage for importers, resulting in a negative impact on all UK refineries," he said.

"As such we have been working with the United Kingdom Petroleum Industry Association to ensure our concerns - and the potential impact of zero tariffs - are clearly communicated to the UK government."

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