Page last updated at 23:32 GMT, Saturday, 19 April 2008 00:32 UK

Shutdown 'risks petrol shortages'

The Ineos facility is the only crude oil refinery in Scotland

Bosses at Scotland's only crude oil refinery have started a shutdown after claiming an impending strike will compromise safety.

Ineos said the Grangemouth refinery could shut for "at least a month", and warned of major fuel shortages.

About 1,200 members of the Unite union are to strike on 27 and 28 April in a dispute over pensions.

Scottish ministers urged both sides to try to resolve the dispute, instead of "trading commentary" in the media.

The Unite union said Ineos' proposed pension changes were "unreasonable".

Ineos said in a statement that it had taken the decision to start shutting down the Grangemouth facility on safety grounds.

It is important that the plant is not only shut down safely but also remains safe through the strike period
Ineos statement

The statement added: "Fuel shortages are likely to begin in Scotland as early as Friday 25 April and the whole of Scotland could be without fuel for at least a month.

"It is important that the plant is not only shut down safely but also remains safe through the strike period and this process can take many days."

The first stage of the closure began on Friday night, with the first plant on the site due to shut completely on Monday.

The remaining plants would be taken offline in a phased shutdown which would be completed by Friday.

The statement said that the action would also effectively shut down much of the North Sea's oil and gas production, a large proportion of which goes through Grangemouth, causing supplies to dry up and leading to shortages across Scotland and the north of England.

Grangemouth supplies Scotland, Cumbria, Northumberland and parts of Yorkshire.

'Panic buying'

Geoff Dossetter, of the Freight Transport Association, told BBC Radio Five Live he was concerned the shutdown could spark panic buying.

"That starts off for fuel but then of course the next step is to be concerned about the delivery of goods to shops and so on - this is where my members within the Freight Transport Association have some concern."

The Scottish Motor Trade Association, which acts for petrol retailers, urged drivers not to fill up tanks as shortages were often sparked by such panic buying.

The changes to the scheme Ineos are proposing are unreasonable
Phil McNulty

Tom Crotty, CEO of Ineos Olefins, said the union was "well aware" a 48-hour strike would cause "fuel chaos" in Scotland and the north of England.

"This is a huge oil refinery and they know you can't just turn it on and off like a tap. A month is our best guess but safety considerations will be at the forefront of everything we do.

"They have deliberately chosen a course of action that is the minimum pain for them, but which will inflict the maximum pain on Scotland and the whole UK."

Mr Crotty described the union's claim that the refinery made 3m a day as "nonsense" and said Ineos needed to invest 750m into the site.

He claimed that the strike threatened that investment, as well as hundreds of jobs, and would damage the UK economy.

Talks urged

Phil McNulty, national officer of Unite, insisted that the company was profitable and the pension scheme was well-funded and affordable.

The union has previously said that Ineos is planning to close the final salary pension scheme after taking 40m from it and slashing its own contributions.

Mr McNulty added: "The changes to the scheme Ineos are proposing are unreasonable, unnecessary and have forced our members at Grangemouth to take industrial action for the first time."

Scottish ministers said contingency measures were already in place and they were being kept informed by the UK Government, which has responsibility for continuity of oil, gas and fuel supplies.

A spokeswoman added: "The Scottish Government is closely monitoring the situation and is fully aware of the potential disruption that could arise.

"The Scottish Government is calling on both sides to get together to negotiate and resolve their differences to avert this action, rather than trading commentary in the media."

Ineos acquired the Grangemouth site from BP in 2005 and is now the biggest privately-owned chemical business in the UK.

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