11:24 24 October 2013
A petrochemical plant at Grangemouth, which supplies 70per cent of the fuel used at Scotland’s filling station, will be closed affecting around 800 jobs, it has been revealed.
The plant also supplies fuel to North of England and Northern of Ireland. This is considered a major blow as it is considered a key part of the Scottish and UK economy.
Alexander Kemp, Professor of Petroleum Economics, at the University of Aberdeen said that there shouldn’t be any problem when it comes to fuel supply. He said: "With petrol and diesel supplies, unless there is panic buying, there should not be a problem as there are plenty of imports.”
Ineos, which owns the petrochemical plant, says that the business is losing £10m a month and needs an investment of £300m.
The plant had been involved in a pay dispute with its workers who were all asked to accept changes to their pensions and other terms such as a pay freeze for 2014-16, removal of a bonus up to 2016 and a reduced shift allowance in order to continue.
The Unite union stated that around half of the site's total 1,370-strong workforce rejected the proposals.
Ineos petrochemicals chairman Calum MacLean said: "This is a hugely sad day for everyone at Grangemouth. We have tried our hardest to convince employees of the need for change but unsuccessfully.
"There was only ever going to be one outcome to this story if nothing changed and we continued to lose money.
"We still struggle to comprehend what has happened here. The employees were offered a chance to secure substantial new investment in the company, preserve their jobs and keep their salaries. Sadly this will no longer be the case.
"As a result of this decision, the directors of the petrochemicals business have had no option but to engage the services of a liquidator. It is anticipated that a liquidation process will commence in a week."
Several refineries in the UK have closed down for the last 10 years and presently there are only 7 remaining. Prior to Grangemouth, Coryton in Essex is the latest to close after its owner filed for bankruptcy last year. Analysts say that this is partly because of cheap fuel imports from the United States.
At the moment, the UK imports 47% of the diesel and 50% of the aviation fuel it needs.
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