Grangemouth, Scotland’s only remaining oil refinery, will close in the next year. This will result in the loss of over 400 jobs and leave the UK with just a few refineries. It also increases the UK’s dependence on imported fuel.
Petroineos, the site’s owner, is a joint venture of Sir Jim Ratcliffe Ineos with PetroChina. It believes that the domestic demand for motor oils will drop sharply when new petrol and diesel vehicles are banned.
Frank Demay said that “the demand for the key fuels produced at Grangemouth is already declining and with the impending ban on petrol and diesel vehicles within the next decade we predict a shrinking market for these fuels.” This reality, coupled with the costs of maintaining a refinedry built 50 years ago, has us exploring new ways to adapt our company.
In November, Petroineos announced that it would be shutting down . The company is hoping to avoid forced redundancies.
Ed Miliband the energy secretary was angered by this decision, as was his Scottish counterpart Gillian Martin. The unions called the loss of the jobs as “industrial vandalism”.
Grangemouth is responsible for 14 percent of the UK’s total refining capacity. It supplies motor fuels, as well as other products to Scotland and northern England. The UK exports petrol but imports jet fuel and diesel to meet its domestic needs.
Scottish politicians, such as Alex Salmond’s Alba Party, have campaigned for the Grangemouth refinery to remain open
Petroineos plans to build an import-export fuel terminal on the site in order to maintain supplies of fuel to forecourts, as well as to other customers. The company stated that despite $1.2 billion invested, the refinery had accumulated losses totaling $775 million. Grangemouth’s infrastructure, which was opened in 1924 and is now ageing, makes it less efficient than its overseas competitors. needs to invest £40 million to make it run beyond next spring.
Petroineos announced that the terminal would close between April and June of next year, with approximately 75 employees remaining to operate the import and export terminal.
A study commissioned by the UK and Scottish government looked at possible future uses of the refinery. Options were considered in areas like hydrogen, biofuels, and sustainable aviation fuel. The refinery is not likely to have any of these options in place when it closes.
In response, the UK and Scottish governments produced a joint plan of investment that aims at preserving industry in Grangemouth. This means an additional £20 million, on top of the previously announced PS80million for the Falkirk & Grangemouth Growth Deal. The deal aims to finance new growth projects within the area.
The UK government announced that it would examine how its National Wealth Fund can be used to support alternative uses for refinery.
The closure is expected to last three months. Another 100 workers will be retained up to one year to start decommissioning. Some will remain longer to supervise more demolition and decommissioning.
Hisashi Kuboyama from the Federation of Small Businesses in Scotland said that ripples will be felt beyond the refinery gates and added: “The impact on small businesses throughout the UK is much greater than the 400 jobs on site.”
The Unite union general secretary Sharon Graham said: This is industrial vandalism pure and simple. The dedicated workers have been let down both by Petroineos, and the politicians at Westminster and Holyrood.
This is the last opportunity for the Labour government to prove that it really stands with workers and communities. “The road to net zero can’t be paid for by workers’ jobs.”
The decision will not affect the other petrochemical activities at Grangemouth, a vast complex located in central Scotland.
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