The UK Government has launched an urgent investigation into the collapse of State Oil, the parent company of Prax Group, which operates the Lindsey oil refinery in North Lincolnshire, jeopardizing hundreds of jobs.

The Lindsey refinery, one of only five large oil refineries remaining in the UK, has faced significant financial challenges, reporting losses of around £75 million since its acquisition from Total in 2021.

Employing approximately 420 workers, the Lindsey refinery is a crucial part of the local economy, while State Oil itself has over 180 employees.

Energy Secretary Ed Miliband has stated that the investigation will scrutinize the conduct of the company's directors and the circumstances surrounding its insolvency.

Despite previous reassurances from the company about its financial stability, recent indications of an inability to continue operations have raised serious concerns about its viability.

Energy Minister Michael Shanks has expressed deep concern over the situation, demanding compensation for affected workers and calling for an investigation into the company's management.

The investigation will focus on financial management and transparency issues, as the government seeks to understand the factors leading to the refinery's collapse.

Joint administrator Clare Boardman has announced that all options are being considered to navigate the current challenges, including potential sales of the group's upstream business and retail operations.

To manage the administration process for the Lindsey refinery, the UK government has appointed FTI Consulting and Teneo to explore potential sale options.

The Insolvency Service has confirmed that three Prax-associated businesses, including Lindsey Oil Refinery Limited, are entering liquidation.

Elizabeth de Jong, CEO of Fuels Industry UK, has emphasized the urgent need for government action to address high industrial energy costs and support the remaining refineries in the UK.

In contrast to the struggling Lindsey refinery, the nearby Phillips 66 Humber refinery remains profitable, underscoring the challenges faced by smaller refineries.