Page last updated at 17:22 GMT, Thursday, 24 April 2008 18:22 UK

Strike could cost UK '50m a day'

Grangemouth refinery
The planned strike is closing down the Grangemouth refinery

Scottish ministers have raised concerns that a planned strike at Scotland's only oil refinery could cause serious problems for North Sea oil and gas.

Workers at Grangemouth will walk out on Sunday after talks between union officials and bosses broke down.

Trade bosses said the potential loss of production at a secondary plant could cost the UK economy 50m a day.

The Holyrood government also warned any move by retailers to hike petrol pump prices was "clearly unacceptable".

First Minister Alex Salmond earlier said there was an "ample and substantial" stock of fuel to cope.

He said fuel would last "well into May" and more could be imported if needed as a result of the two-day strike.

The first minister also urged members of the public not to panic buy - but asked them to cut non-essential trips and use public transport.

It would clearly be unacceptable if any retailer were to take advantage of the potential of localised fuel shortages and increase prices
John Swinney
Scottish finance secretary

He added: "The essential message is that the stocks of the available range of fuels will stretch into May and there is the capacity to import more if required."

Fuel retailers in Scotland say they have enough supplies to last ten weeks - as long as motorists do not panic.

Grangemouth powers the BP Kinneil processing plant, which receives about 725,000 barrels of crude oil and 80 million cubic metres of gas a day from the Forties pipeline, in the North Sea.

Malcolm Webb, of the trade body Oil and Gas UK, warned of grave implications over any loss of production at Kinneil.

In an emergency statement to the Scottish Parliament, Finance Secretary John Swinney said: "While this plant would be ready to operate soon after the end of the industrial action, there will still be the possibility of disruption to production.

"This could place a substantial penalty on upstream production and could affect almost a third of oil producers in Scotland."

The plant is directly connected to the Forties oil field system in the North Sea and has an annual capacity of about 10 million tonnes of crude oil
Crude is also imported to the site from around the world
The system has to be powered down gradually, but there is no "off switch" as such
Each plant's equipment has to be cooled and a gradual reduction in pressure maintained
The same gradual reactivation has to occur when the system is restarted
Parts of the facility are regularly shut down for maintenance, although this weekend would mark the first total shutdown in the plant's history
Despite their differences, both the management and the unions said that safety at the plant was a priority and that it would not be compromised during the dispute

Mr Swinney said ministers would continue to work with fuel retailers, but warned: "It would clearly be unacceptable if any retailer were to take advantage of the potential of localised fuel shortages and increase prices."

Meanwhile, UK Business Secretary John Hutton told the Commons there was no need at present to take further steps under emergency powers to ensure supplies.

He added that the industry was confident any localised shortages would be re-supplied quickly.

Grangemouth operator Ineos and the Unite union held two days of talks at conciliation service Acas, but failed to resolve the dispute, surrounding changes to its pension scheme.

The dispute caused confusion at Edinburgh-based Lothian Buses, after the operator said it may have to halt services because BP was prioritising deliveries to petrol stations.

Scottish ministers later said there had been a "misunderstanding" and the bus company would receive diesel.


Business secretary seeks to ease fuel crisis fears

BP was also withdrawing a promotion on Scottish forecourts and north of England, after fears it might encourage drivers to unnecessarily fill up their cars.

Customers had been offered double points on the Nectar loyalty card scheme if they bought at least another 10 litres of fuel within a week of visiting a BP garage.

The Scottish Motor Trades Association branded the promotion "a bit silly" saying it sent out the wrong message.

Acas said that, although the two sides in the dispute had not come to an agreement, time had been spent addressing the issue of safety and the integrity of the Grangemouth site during the strike.

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