The fuel panic begins

With ministers warning against panic, a snapshot survey of garages by The Scotsman found 5am queues at the pumps, sales increases of up to 50 per cent and prices already on the rise. At least one petrol station ran out of fuel completely.

The chaos came as pension negotiations between unions and management at the Grangemouth refinery appeared to break down completely. The owner, Ineos, claimed Unite officials had refused to engage in talks – but the union insisted it was happy to do so at any time.

Alex Salmond, the First Minister, urged both parties to get round the table, and the UK and Scottish governments were working on contingency plans.

Westminster – which has the final responsibility for fuel supplies – has said it could be forced to import from overseas to offset the shortages caused by the shutdown, and one expert warned diesel prices could shoot up.

The Scotsman's Pricewatch survey of petrol stations found the average price of unleaded petrol yesterday was 106.6 and the average price of diesel 118.7p. It also found almost half the outlets had increased prices since the strike was announced.

As the deadlock intensified, motorists rushed to the pumps – despite the calls for calm.

Lisa MacMillan, of Gifford, East Lothian, said she had queued at a Shell station near Musselburgh for more than 20 minutes yesterday afternoon.

"I went because a friend had rung to say there was going to be a shortage and I certainly didn't want to run out," she said. "There was a long queue of cars, and the woman in front of me filled her car up and then five red plastic petrol cans as well. A man joked that she might have a couple of lawnmowers which needed to be filled up.

"But although people were joking about it, you could see everyone being rather disapproving as well, because it's stupid buying like that which leads to shortages."

Staff also noticed the panic. Mary Fraser, an attendant at the South Inch Filling Station in Perth, said business had been brisk, with customers who usually only bought 10 to 20 of fuel filling right up.

One garage worker on the south side of Glasgow said there had been queues from about 5am yesterday, while the Asda forecourt in Grangemouth – in the shadow of the refinery – ran out of fuel altogether.

Andrew Taylor, a supervisor at the Shell petrol station in Kerse Road, Stirling, said it had sold about 50 per cent more fuel that would have been usual for a typical Sunday.

He said: "A lot of the people coming in have been mentioning the strike at Grangemouth, and I think the fuel blockades of a few years back are probably still in people's minds."

Operations at the refinery, which serves Scotland, Northern Ireland and the north of England, have been winding down since Saturday, ahead of the planned walkout by up to 1,200 workers next Sunday and Monday.

Ineos said it was too dangerous to continue work and the firm was now cooling and decontaminating the site, claiming it would take a month to get it operating at full capacity again.

Its managers said they expected garages to run out of petrol and diesel, and the last point at which they could restart production without disruption to the public would be today or tomorrow.

However, Nick McGregor, an oil and gas analyst with Redmayne Bentley, said he believed consumers would not be greatly affected: "I think that, as long as people don't change their buying patterns, then the system should just about cope.

"There are reserves that will easily cover the timeframe of it being wound down and getting back up to full production."

He said that European Union member states were required to hold reserves to cover 67 days without production, and the issue would be getting this from its disparate holding places to where it was needed.

He said the UK refined more petrol than it needed and exported the leftovers. However, it was not so adept at diesel and jet-fuel production, and it was these markets the Grangemouth shutdown might affect.

"Any going into reserves is likely to worry the markets and push prices for those products up," he added.

Mr McGregor said it was a particular concern because recent energy policy had encouraged reliance on diesel. "It will probably be OK," he said. "It's more if it develops into anything more sustained and the argument becomes more protracted. It's a fairly tight market and, while it's not a problem for two days, any more could start to cause genuine issues."

Stuart McKinnon, of the Federation of Small Businesses Scotland, said the potential disruption was "dreadful news" and he urged the Scottish Government, or Westminster, to step in as soon as possible. He said: "The general population in Scotland has a reliance on small businesses, and if they can't access the fuel they need, then it's obviously going to be disastrous."

Previous fuel shortages caused by road hauliers' blockades had had a major impact on the federation's members, he added.

A spokeswoman for Oil & Gas UK said the industry was waiting to establish how the strike would affect the BP pipeline that brings in oil from the North Sea. She added that they hoped the union and refinery management would resolve the situation as soon as possible.

But last night, Tom Crotty, Ineos's chief executive, said he was "extremely disappointed" at what he claimed was Unite's rejection of an invitation by the conciliation service Acas to enter into talks.

He said: "The union's planned strike could have significant consequences for Scotland and the north of England and we would urge them to work with us to find a way of resolving this issue."

He has written to all 1,350 Grangemouth employees asking them directly to accept a new set of revised pension proposals.

However, Phil McNulty, of Unite, said it had "not even been asked" to get round the table with Acas, but was "happy to talk at any time".

He added: "If the company withdraws its threat to pensions, we'll call off the strike."

The company wants to get rid of its final salary pension scheme for new employees, while retaining it for current staff, and make further changes to pensions.

Speaking at the SNP conference in Edinburgh, Mr Salmond called on both sides to get round the table "and stay there" until they resolved their differences. He said their actions were "threatening the disruption of fuel supplies".

A spokesman for the Scottish Government said it had initiated contingency measures last Thursday and that ministers had been liaising with their UK counterparts.

The Department for Business, Enterprise and Regulatory Reform at Westminster has compiled the National Emergency Plan for Fuel, which is followed in times of shortages. The options in it include demand-calming measures and priority-use schemes.

A spokeswoman said she expected there to be no disruption to the supply across Scotland, including rural areas. She added that fuel could be imported from overseas if necessary.

Refinery shut-down will span 'best part of a month'

STRIKE action has forced the closure of Grangemouth oil refinery for the first time in its 74-year history.

The painstaking process of closing down the complex facility in preparation for the threatened action began on Saturday.

Today, the first of the plant's crude oil tanks will be shut down – which refinery owner Ineos says will directly effect fuel production.

A spokesman for the firm said last night: "I couldn't put a figure on it, but as of tomorrow, it won't be at full capacity. It will be down significantly and we will gradually bring everything off-line by Friday."

He said the shutdown, which will involve cooling and decontaminating the plant, would be a round-the-clock operation.

"I am told that as of tomorrow, as we start to impact fuel production, it is not irreversible, but we will suffer capacity issues.

"A Thursday resolution will not result in a Saturday switch back. It will take a lot longer."

The refinery takes ten days to shut down from start to finish, and several weeks to get up and running again, meaning the whole process would take "the best part of a month".

The plant serves Scotland, Northern Ireland and the north of England and began operations in 1924.

A massive expansion programme was completed in the early 1970s, which brought the refining capacity up to 8.6 million tonnes per year.

It now produces 200,000 barrels a day and is the sixth-largest refinery in Britain.

Tom Crotty, chief executive of Ineos, said: "This is a huge oil refinery and (Unite] know you can't just turn it on and off like a tap.

"A month is our best guess but safety considerations will be at the forefront of everything we do.

"They have deliberately chosen a course of action that is the minimum pain for them but which will inflict the maximum pain on Scotland and the UK."