Pandemic slump blamed for 200 job cuts at Grangemouth, UK’s oldest crude oil refinery

AROUND of third of the workforce at the century-old Grangemouth refinery could be lost as production is scaled back in response to the pandemic’s drag on demand for fuel.

Bosses at the plant, operated by Petroineos, plan to mothball two production plants which have not been operational since the lockdown in March, cutting around 200 from the 637 full-time staff.

A  spokesman said the changes come after 30 years of falling fuel demand, with vehicles becoming more fuel efficient and the rise of electric and hybrid motors. He added: “Covid has really taken that over a cliff edge.”

Petroineos, run as a joint venture between PetroChina International London and Ineos,  says it will ensure “a viable longer-term business” employing up to 450 workers at the site.

Shutting down the two affected parts – the Crude Distillation Unit 1 and the Fluidised Catalytic Cracker Unit (FCCU) – will reduce CO2 emissions there by 500,000 tonnes a year.

The refinery at Grangemouth has been operating since 1924 and was one of the first to transform crude oil in the UK.

Oil prices have crashed since March, briefly hitting negative territory, as a combination of falling demand and rising production weighed down on prices.

In recent weeks, Brent crude has tipped back above the $40-a-barrel level and the success of Pfizer’s  Covid-19 vaccine trial saw 7.5% gains yesterday, with analysts forecasting a rebound to pre-Covid levels in the second half of next year.

Grangemouth currently produces a range of fuels including petrol, diesel, kerosene, LPG and jet fuel, and refining margins have been hit hard across the industry.