Niche Info Online Business

By Andrew Alderson, Jasper Copping and Richard Gray
Last Updated: 10:45am BST 27/04/2008
Staff at the Grangemouth oil refinery began their 48 hour strike this morning, as preparations were made to ship fuel from Europe to prevent pumps from running dry.

An emergency convoy of seven tankers carrying 65,000 tons of fuel, mostly diesel, is due to arrive from Europe in the next few days.

The shipments from Rotterdam, Amsterdam and Gothenburg will be unloaded on the river Forth, Scotland's busiest shipping lane. They will provide enough fuel to keep Scotland running for nearly 10 days.

Officials hope that the deliveries will avert the panic buying that was spreading south of the border yesterday, with the first pumps running dry in the north of England.

Announcing the deliveries, Alex Salmond, the First Minister of Scotland, 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 refinery in Stirlingshire."

Mr Salmond said public servants would be urged to cut their use of petrol and switch to public transport where possible. "By pulling together we can minimise the disruption Scotland faces."

As concern grew, the Government admitted the country faced a "challenge" to keep fuel on garage forecourts.

The Forties oil pipeline, Britain's biggest, was due to shut completely from 6am today because of a 48-hour walkout by 1,200 workers at the Grangemouth refinery in Stirlingshire.

As fuel shortages and queues spread south from Scotland, there were isolated reports of garages out of petrol.

At Peter Marwood's Total Garage in Richmond, North Yorks, some pumps ran dry as the filling station was overrun with motorists. Jeff Savage, a cashier at the garage, on Darlington Road, said: "This morning was manic. People were panic-buying, desperate to fill up."

John Hutton, the Business Secretary, urged Britain's 33 million motorists not to panic buy and suggested the strike would create problems if they started to stockpile petrol. "There is every reason to believe that we will get through this period sensibly if people continue to buy fuel sensibly, too," he said. "But of course there is going to be a challenge if people change the way that they consume fuel."

He said a national emergency plan - in place since the fuel protest of 2000 - would only be triggered by a shortage of supplies which, he said, would not be the case for "a significant period of time".

Petrol and diesel prices are soaring, with the average price of unleaded petrol poised to top £5 a gallon (£1.10 a litre). A small number of garages were already rationing customers, with some permitting each motorist to buy just £10 worth of petrol. Others have been accused of profiteering.

In Edinburgh, the forecourt was virtually empty at the Shell garage at Crewe Toll, with most nozzles out of use. A sign on one pump said "diesel only".

Diesel had run out at the BP station on Edinburgh's Queensferry Road, and the Shell station on Glasgow's Woodlands Road. The Shell garage at East Marketgaite, Dundee, was out of petrol, with staff saying they did not know when they would receive another delivery.

Val Pattinson, 47, the manager of a petrol station in Blaydon, Tyneside, where she has worked for 13 years, said she had not seen anything like it since 2000. "People are panic buying. We are always a busy garage but it's been extremely busy and the fills people are doing are very large. You are going to get the hauliers coming here for fuel and to fill up and that's when we will run out. I just don't think there is any need to panic-buy at all."

INEOS, which owns Grangemouth, accused Unite, the striking union, of jeopardising future jobs and investment. "They are holding the country to ransom. This is the first time in living memory that the whole plant has been shut down," a spokesman said.

Experts predict it could be two or three weeks before the company is back in full production. It is estimated the pipeline closure will cost the economy £50 million a day.

The Forties pipeline brings in 700,000 barrels of oil a day from the North Sea - 30 per cent of Britain's output - as well as 2.8 billion cubic feet (80 million cubic metres) of gas a day.

Norman Baker, the Liberal Democrat transport spokesman, said: "The price of oil is going in only one direction and that's upwards and fast. We need to start weaning ourselves off our dependency on oil."