Scotland’s last remaining oil refinery at Grangemouth will close between April and June next year, resulting in the loss of 400 jobs and leaving the UK with only a handful of refineries.
The closure, announced by Petroineos—a joint venture between Sir Jim Ratcliffe’s Ineos and PetroChina—comes as domestic demand for motor fuels declines, exacerbated by the forthcoming ban on new petrol and diesel cars.
Frank Demay, Chief Executive at Petroineos Refining, stated that the demand for key fuels produced at Grangemouth has already started to decline. “With a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink,” Demay said. The company cited the costs of maintaining a refinery built nearly a century ago as a significant factor in the decision.
The announcement has sparked criticism from political leaders and unions. UK Energy Secretary Ed Miliband expressed deep disappointment, while his Scottish counterpart, Gillian Martin, and union leaders condemned the decision as “industrial vandalism.” Grangemouth currently accounts for about 14% of the UK’s overall refining capacity, supplying motor fuels and other products across Scotland and northern England. Although the UK remains a net exporter of petrol, it relies on imports for diesel and jet fuel.
To mitigate the impact of the closure, Petroineos plans to establish an import and export fuel terminal at the site, ensuring continued supply to forecourts and other customers. The refinery has faced ongoing financial challenges, with accumulated losses of $775 million since 2011 despite a $1.2 billion investment. Its ageing infrastructure, originally opened in 1924, is less efficient than that of overseas competitors and requires an additional £40 million to remain operational beyond next spring.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.