Hundreds of skilled jobs are set to be axed after it was confirmed Scotland’s last oil refinery will close next year.
Petroineos announced today it would cease refining operations at Grangemouth in spring 2025 and proceed with a plan to convert the site into an oil import terminal.
The neighbouring petrochemical plant on the Forth will continue operating as normal and is not impacted by the refinery’s closure.
Petroineos, which is a joint venture between the Chinese state and Ineos, said it would now begin a formal consultation period with the 475 staff currently employed by its refinery business.
The energy giant had previously announced in November 2023 its intention to wind down the refinery, prompting a campaign by the Unite trade union to protect jobs.
CEO Frank Demay blamed declining demand for the “key fuels” produced at Grangemouth for its closure, as well as the rising costs of maintaining the century-old refinery.
“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 further,” he said.
“That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business.
“The action we are taking to create an import terminal will safeguard fuel supply for Scotland. We currently expect Grangemouth to be ready to operate as a national distribution hub for finished fuels next year.
“Unfortunately, a terminal would require only around one-fifth of the current refinery workforce.
“Therefore we will soon enter an information and consultation process with representatives of our employees to discuss the proposals.
“We have already agreed to move from the UK statutory minimum redundancy terms to an 18-month package and if plans proceed we intend to do everything we can to reduce the impact on our people. We will of course be seeking to minimise compulsory redundancies as far as possible.”
To sign up to the Daily Record Politics newsletter, clickhere