Ben Laurance, Jonathan Leake and Dominic Tobin
We've made some changes
to The Sunday Times
SEVERE fuel shortages could hit northern England and Scotland for up to a month because workers at Grangemouth, Scotland’s only oil refinery, have voted to go on strike.
Petrol stations will run dry and aircraft may be unable to refuel from the end of April through much of June unless the dispute is resolved in the next few days.
Grangemouth’s 1,200 workers are said to be furious at plans to slash the value of their pension scheme and close the final salary pension scheme to new workers.
The strike is scheduled to last only two days, on April 27-28, but the lengthy procedures needed to shut down and restart the refinery mean the disruption to supplies will last much longer.
Ineos, the owners of Grangemouth, in Falkirk, have already begun shutting down production in anticipation of the walkout, and the ‘point of no return’, when fuel stops being produced, is understood to be on Friday.
“If the shutdown continues, Grangeworth will stop producing fuel and there will be shortages primarily in Scotland and Northern England,” a spokesman for the firm said.
“We produce a significant proportion of fuel that is sold in the region and the disruption will include airports, including Glasgow and Edinburgh, as well as those in North England.
In recent years Ineos has become the world’s third largest chemical company with annual sales of more than £20 billion.
Based in the upmarket New Forest town of Lyndhurst, Hampshire, it was created by James Ratcliffe, who has been labelled Britain’s “most private billionaire”.
In the last decade he has borrowed billions of pounds to create a series of mergers and buy-outs that brought together companies formerly owned by ICI, BASF and BP under the Ineos banner. Ineos now comprises 19 chemical companies with 76 manufacturing facilities in 20 countries. In 2006 it recorded operating profits of £630m, however this figure which excludes interest payments on its borrowings.
Unite, the trade union organising the strike, claimed the effects would be felt throughout the country.
A spokesman said: “The refinery directly supplies to Scotland and northern England, and the strike will cause disruption for a month if it goes ahead. The demand from the empty petrol pumps in the North will suck supply from the middle and bottom of the country, causing disruption to the whole of the UK.
“Friday is the critical day - the point of no return.”
Ineos said the stoppage would also effectively close down a large proportion of North Sea oil production as well as some gas production which is routed through Grangemouth, and will have nowhere to go. Gas supplies should not be affected, they say.
Both sides say they want to resolve the dispute in the coming week, without the need for industrial action.
Ineos plan to cool the plant down, and remove oil and gas from the site, to make it safe during the strike. The subsequent warm-up could take weeks.
“The union is well aware that a 48-hour strike will cause fuel chaos in Scotland and the North of England for weeks on end,” said Tom Crotty, Ineos’ chief executive.
“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. It is not our wish to suspend production at Grangemouth but Unite has given us no choice."
Unite claim the pension proposals are a penny-pinching measure that could more than halve the retirement income of workers at the refinery.
Their spokesman said Ineos would save £1.3m a year from the scheme, but made £3m profit a day.
Ineos rejected the claim as “nonsense”. “The union has jumped the gun in the middle of the consultation process. We have not even put our final offer on the table yet,” said the spokesman.
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I see the chancellor admitted on TV today they are in control of the BOE and want house prices to keep going up, and think you will vote for them in the election and they will win...
Well this just proves they are corrupt and want votes
why dont they use their power for some good, lower prices, by increasing interest rates...
Life in the UK is now like a luxury item under labour, only the rich can afford to live and work...
dave, Chester, Cheshire,
Looks like the socialist genie is out of the bottle again. Well done Gordy, you are taking us back to 1978 ! Shame there is no Maggie on the horizon to finish you off - only "Dave".
Martin, London, Nu Labour Paradise
It looks very much like a repeat of the final days of the Callaghan Labour Government. Our 'Dear Leader' comes back to a real 'Can of Worms' after his trip to the States. Bitching and Backstabbing rife in his own Party, not what he wants to hear.
The fact that so many Companies etc are closing down 'Final Salary' pension schemes is at the root of the problem. How will this be resolved, that is the conundrum. In the case of the grangemouth refinery, it will be the Scottish Assembly Members and First Minister, Alex Salmon who will be unwillingly drawn into this dispute.
B Clark, Chelmsford , Englabd UK
Well, Gordon Brown has destroyed many, many pension funds already, not to mention Equitable Life, severly impacting people's lives 'down South'. Let's just see if he treats his fellow Scots any differently to the English on this occasion.
R.M., London, England
Oh dear here we go again. I think it's high time people seriously look at their energy consumption including petrol to find ways of not using it. Having just moved to Chicago we decided not to buy a car, it's not been too bad as we can rent if we are desperate and use ZipCar for hourly rentals for local travel.
We can't keep burning this stuff. Also at $115 a barrel if we don't do something now the price will continue to rise. day after day. And it will be our own fault.
Anthony Stewart, Chicago, ILLINOIS
If the workers at the refinery are prepared to plunge Scotland and northern England into the Stone Age for a few weeks, then maybe it's high time the Government used the Civil Contingencies Act to freeze their bank accounts so they can't eat.
Michael Petek, Brighton, UK
As usual, the workers are suffering the loss of their pensions in a penny-pinching exercise while the huge profits are still rolling in. But there's a bigger picture here - this could be a dry run for the coming fuel shortages in the future. It is something we are all going to have to get used to. Apart from the inconvenience to ordinary people, it will be interesting to see what will be the wider effects will be in Scotland and the North and what contingencies the government will put in place. Perhaps Gordon Brown should spend less time posturing on the world stage and more time dealing with the problems at home.
Colin, Oxford,
sorry tough, because they now have to pay into into a pension scheme which before the company was sold was free.
they have always been paid premium wages now its just a little bit worse off
welcome to the real world guys
Richard Dow, Stenhousemuir,
The SNP seem to be a bit quiet on this one. How do they propose dealing with this massive stategic risk to the viability of an independent Scotland? An English bail-out???
The more I see of who would pull the strings post independence the more I'm betting this would be a backward, corruption-ridden socialist hellhole & failed state within 10 years.
Edward, Edinburgh, UK
How on Earth could one firm have been allowed to develop such a monopolistic stranglehold on a vital strategic resource?
This morning, I heard an apologist for the company claim that the changes which have prompted the strike are necessary "In order to remain competitive in the global economy". Since no evidence was given for any overseas sales from this refinery, I cannot see how this argument holds any water. Profiteering is the word for this behaviour.
Bill Q, Derby,
If Brown can produce £50bn to prop up the poor old banks so they can make even more money out of mortgages, perhaps he could produce another £50bn to prop up the final salary and other pensions he has been raiding over the last decade, condeming people to work as long as possible to avoid poverty in retirement.
Mike, Whitby, North Yorkshire
Did you read where the company are making 3 million pounds a day. But can,t or wo,nt pay 1.3 million a year for a pension fund. To me the refinery workers have a right to strike to protect their pensions. Yes i know it will cause shortages at the pumps But the refinery workers have the right to strike over a legitimate greivance. Still they have time to talk to one another, so lets hope the strike can be averted.
Bill, Hartlepool, England
We live in the 21st century, this Neanderthal behaviour of holding the country to ransom reeks of the old days. The government should very quickly get every one around the table and bang heads together. If the unions have a genuine grievance, then sort it out, if the company is acting within their right, then slap a legal order on the union banning a strike which could have a major impact on the economy and the liveliehood of millions. Anything else is collective Neanderthal behaviour. Sorry, we have too much at stake to be going on playing silly games, on both sides. Sort it out now for the sake of the workers and the country, neither of whom wants this.
John, Glasgow, UK
But the reason for the closure of the final salary pension scheme? Gordon (the Destroyer) Brown. It was he who waved aside the advice of his own department and removed the tax concessions for pension funds. The oil company is merely doing what it must to remain solvent.
He has condemned future millions to a poverty stricken old age.
Richard Crompton, Baden, Switzerland
I wish they'd strike for the greater good - petrol prices.
Now would be a good time for Stanlow to down tools
Phill, The Wirral,
Just in time for the local elections. Superb stuff. Spring of discontent anyone?
Tme for a change.
Paul, Nottingham, UK
Who in government was asleep at the wheel and allowed critical national infrastructure to be acquired by a highly-leveraged, secretive whiz-kid?
Colin Soames, London,
Here we go again. And how much is fuel going to rise this time. You can bet your bottom dollar that the government will do nothing to help because as fuel prices rise so do the governments cut from fuel duty and vat. I bet Gordon Brown is rubbing his hands over this one. Only the less well off will suffer, whether from the rise in fuel prices or the rise in food costs which will inevitably follow.
Goodbye Britain, I'm off ................................
Charlie, London,
Just like the 1970's allo ver again. Oh the nostalgia!
Austin Tassletine, South West, UK
The panic starts here - and great timing as well. How is our esteemed Prime Minister going to cope with this one? And in his own back yard as well!
Paul, Coventry,
My God in this day and age it is time to make operations like Grangemouth Essential services if necessary under the umbrella of National Security, You cannot let a handful of people dictate to a Nation its absolute Anarchy, The Military should be sent in there immediately, All senior operators on that site should have been made to sign non disruption clauses upon taking up employment, Where is Mrs Thatcher when we need her? , A mediator should be appointed and both sides ordered into Binding Arbitration right now. But there should be no disruption to fuel supply, To shut down a refinery of this magnitude in the UK is intolerable
Peter K, Vancouver BC., Canada
I would be furious too if my pension was slashed. I bet you the director's pensions will not be slashed though, only the poor workers.
Babis Gakis, Braintree, United Kingdom