Scotland Avoids Fuel Crisis

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Scotland has narrowly avoided a serious fuel shortage after a planned strike at the key Grangemouth oil refinery and petrochemical plant was called off.

The 48-hour walk out planned to start on Sunday by members of the Unite workers union would have crippled fuel supplies in Scotland and impacted other areas including Northern Ireland and the north of England. Despite talks breaking down in recent days, Unite called off the strike but the prospect of further action is looming over the troubled refinery. Grangemouth is the only Scottish oil refinery, processing 210,000 barrels of oil per day and providing most of Scotland's fuel. It is owned jointly by INEOS (Switzerland) and PetroChina Company Limited (SHA:601857) (Beijing, China), China's largest oil & gas distributor and producer.

This week, U.K. Energy Secretary Edward Davey, stated: "We have been working closely with the fuel industry and Scottish Government to put robust alternative supply routes in place in the case of a strike, which means that motorists can carry on as normal and other impacts will be kept to a minimum."

On news that the strike had been called off, Davey added: "I have worked hard with both sides to persuade them to attend talks with ACAS and I am extremely pleased that this is now happening. This is a very welcome and encouraging step. ACAS has the expertise to help both parties reach a sustainable solution for the company, the workforce and the whole economy."

However, despite calling off the strike, union Unite lashed out at refinery owner INEOS.

"We are outraged that Ineos representatives walked away from ACAS talks, after sixteen hours of negotiation and on the cusp of an agreement, for the ludicrous reason that Ineos Chairman Jim Ratcliffe instructed his management representatives to demand an apology on his behalf," it stated. "Unite offered Ineos every proposal we could practically make, specifically an offer to enter into negotiations under the auspices of ACAS to secure the future of Grangemouth with the immediate call-off of all industrial action and a guarantee of no strikes during these negotiations."

Unite added: "The safety and integrity of the site and the local population are now paramount and we have an obligation to ensure that Ineos does not permanently decimate the plant's assets and the workforce with this cold shutdown. As as a result, Unite will now call off all industrial action with immediate effect in order to protect this national asset from the scandalous behaviour of its owner. The plant should now start the return to full production and there is no excuse for this not happen."

INEOS refuted the claims. Calum MacLean Grangemouth Petrochemicals (UK) Chairman, said: "We came to ACAS in good faith and remain determined to resolve the issues facing us if at all possible. Unfortunately, Unite seems determined to insist on one rule for union officials and one rule for everyone else which is completely unacceptable to the company. It also seems determined to ignore the fact that a strike could destroy Grangemouth and cause significant damage to the whole of Scotland."

Grangemouth employs over 1,300 workers. INEOS maintained that the plant is making losses of almost €12 million ($16 million) per month and has warned that the plant will have to be shut by 2017 unless a feasible survival plan - which includes cuts to pensions - is agreed upon.

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