Scotland over a barrel

THE Grangemouth oil crisis escalated dramatically last night after workers refused to unload a tanker carrying 120,000 tonnes of fuel destined for forecourts.

Unions claimed the Astro Arcturus, berthed in the Forth, was attempting to break the strike and not, as agreed with refinery owner Ineos, delivering supplies to the emergency services.

Although several tankers have unloaded in recent days, continued shipments from the Netherlands and Sweden are crucial to keeping Scotland moving in the weeks ahead.

Last night, the Scottish Government revealed that seven more tankers, carrying a further 65,000 tonnes of fuel, were expected in the Firth of Forth this week, but union officials set a collision course by saying there was no agreement to unload them.

The extra cost of shipping fuel across the North Sea is likely to be passed directly to motorists and could mean prices hit £1.50 a litre during the dispute, it was claimed last night.

Meanwhile, the strike is set to cause serious economic damage if, as expected, the BP Forties pipeline is shut early this morning, cutting off £50m a day in oil company revenue and depriving the Treasury of £30m a day in tax.

But despite the mounting crisis, motorists appeared to be holding their nerve yesterday as most garages reported they still had stocks of fuel and there was little sign of the panic buying seen towards the end of last week, despite fuel prices hitting £1.23p-a-litre for unleaded in Shetland.

Some shortages were, however, reported yesterday in the north-west and north-east of Scotland. The political row over the dispute was also escalating last night. Prime Minister Gordon Brown came under pressure from political opponents to intervene, and was accused of failing to realise the seriousness of the crisis.

The oil and gas industry has also urged the Government to intervene. Chief executive of Oil & Gas UK, Malcolm Webb, said: "We appeal to the Government to intervene urgently with Unite and Ineos to stop the industrial action at Grangemouth from spilling over and hitting offshore production. This is now affecting some 80 companies and their operations which are in no way connected to or involved in this dispute."

The Grangemouth row centres on planned changes to pension plans for the plant's workforce and has led to staff beginning a 48-hour strike this morning. Last night, officials at Unite, the union representing the employees, said they could not rule out further action. Spokesman Pat Rafferty said: "We will evaluate the situation after the strike."

The refusal to unload the Greek-registered Astro Arcturus came after the vessel docked at Hound Point near Grangemouth yesterday.

Unite had agreed to allow a 'skeleton staff' on to the jetty where it was moored, but had not reached agreement with the company over unloading its cargo. As a result, the cargo was last night still on board.

A spokesman said: "We have pleaded with them to provide the cover needed to offload those cargoes. There is an agreement for providing fuel for key workers and emergency services. The point is around offloading for other uses. We are bringing in

as many (tankers] as we can from all over Europe."

The new convoys may also face similar problems in offloading their shipments from Rotterdam, Amsterdam and Gothenburg. A union spokesman said that its members would not unload any vessels that docked at or near Grangemouth.

He said: "Our members will make the jetties safe and that's it. We will unload only to supply island areas and emergency services."

On an average day, Scotland consumes about 6,000 tonnes of diesel, so these additional imports represent nearly 10 days of normal supply, ministers said.

First Minister Alex Salmond said:

"From across Europe, unprecedented supplies of additional fuel are arriving in and heading for the Forth over the coming days to make up for the loss of production at Grangemouth.

"That's good news for the country and is tangible evidence of the advice we have had for some days from the industry – that we will have ample fuel supplies to see Scotland through this dispute and well into May."

Ineos has tried to circumvent the Grangemouth refinery strike by importing fuel – "millions of dollars' worth a day", according to industry insiders – from the continent.

But as it has been forced to pay 20% extra for the cargo, it is virtually certain that the hike will be passed on to motorists.

According to an industry insider, Ineos is paying $1,108 per ton of refined fuel, compared with the normal rate of crude, which last week was $819. Instead of selling its own fuel to wholesalers at around 32p-a-litre, Ineos is currently having to spend 50p-a-litre on foreign fuel and that means the 17p price difference will invariably get picked up by the consumer, meaning a potential £1.50p for a litre of diesel.

He said: "They are spending literally millions of dollars a day buying fuel from around the world to bring into the UK to keep the country running."

Petrol and diesel prices showed wide variations across Scotland yesterday as the impact of the fuel strike continued to bite.

Glasgow appeared to be the most expensive city in which to buy a litre of either fuel, with motorists paying up to £1.19 a litre for unleaded petrol and £1.28 for diesel.

In Edinburgh, average prices were around the £1.11 mark, but were slightly cheaper in Aberdeen and Dundee. Glenrothes, in Fife, had the highest prices for diesel at £1.30 a litre.

Prices went up across the board by about 6p last week, also reflecting the record prices of oil on the international markets. However, analysts said they are expected to escalate further over the next few days as oil companies attempt to recoup the additional cost of importing oil to make up for shortages caused by the closure of the Forties pipeline.

Yesterday, panic buying of petrol appeared to ease from its height on Thursday and Friday as motorists had either stocked up or heeded Government warnings not to rush out to needlessly fill their tanks.

Although a few garages reported shortages, it was mainly due to a lack of tanker drivers to deliver fuel stocks to forecourts. As a result, some garages were still operating rationing systems.

But the overall picture from around the country was that shortages had eased. At the Morrisons petrol station on Ferry Road in Edinburgh, a spokeswoman said: "At times it has been very, very crowded with a lot of people waiting, but at other times there are no queues at all."

In Glasgow, the Government's assurances seemed to have paid off as it was business as normal at the pumps. There were shortages of diesel and petrol in places, but assistants said this was down to panic buying early last week.

In Dundee, forecourts appeared eerily quiet for a Saturday, with garage owners claiming any panic was over.