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Strike could cost UK economy €65 million per day

Latest update : 2008-04-28

For a second day running, strikers at the Grangemouth oil refinery forced the closure of a key pipeline that supplies 40% of Britain's oil and gas. Industry body Oil and Gas UK puts the daily economic loss at €65 million. (Story: N.Rushworth)

A strike at a major British refinery entered a second day Monday, pushing oil prices to a new record high and forcing petrol rationing on panicked car drivers.
   
The 48-hour walk-out by around 1,200 workers at Grangemouth, west of Edinburgh, began Sunday and has since pushed oil prices very close to 120 dollars per barrel.
   
The strike has forced British energy giant BP to shut down the neighbouring Forties pipeline which supplies 40 percent of Britain's oil and gas.
   
New York's main oil futures contract, light sweet crude for delivery in June, touched a record 119.93 dollars a barrel in electronic deals on Monday.
   
Britain's offshore energy industry body Oil and Gas UK estimates the pipeline closure will cost the domestic economy 50 million pounds (65 million euros, 100 million dollars) per day in lost production.
   
The Forties pipeline brings more than 700,000 barrels of crude oil ashore every day, supplying Britain and international markets. It cannot function without power and steam from Grangemouth.
   
Unite union workers at the refinery are striking over pensions and took out advertisements in Scottish newspapers Monday to explain their position and ask for public support.
   
"Our members have been accused of being greedy and irresponsible but this strike is not about getting more money from their employer or an attack on the ordinary people of Scotland," Unite national officer Phil McNulty said.
   
"The Grangemouth workers are having to strike to defend their existing pension scheme which, despite the fact it is well-funded and in profit, their hugely rich employer, Ineos, wants to close it."
   
Ineos chief executive Tom Crotty told the BBC: "We have made concession after concession from our original position to try and keep them negotiating."
   
Despite assurances from the government that sufficient supplies were being shipped in, many motorists, particularly in Scotland and northern England, rushed to pumps to stock up on Sunday.
   
Some petrol stations introduced rationing or hiked prices while others ran dry.
   
The Scottish government is shipping around 65,000 tonnes of fuel -- mostly diesel -- in from Europe to bolster supplies during the action, which should be enough to last about 10 days.
   
Three tankers from mainland Europe were already in Scottish waters, with five more due to arrive within two days.
   
Staff and families held a demonstration Sunday outside the refinery, which experts have said could take weeks to get back to full operational capacity.
   
Brent North Sea crude for June delivery rose 72 cents to 117.06 dollars a barrel after a rise of 2.00 dollars to 116.34 dollars on Friday, when the contract hit a record intraday peak of 117.56 dollars.
   
Over the past two weeks oil has crashed through a series of records, sparking international concern. Prices were boosted by the weaker US dollar, supply worries and the OPEC cartel's reluctance to increase output, dealers said.
   
Some 70 oil fields feed into the Forties pipeline. Around two-thirds of oil from it is immediately exported.
   
It is the first time in more than 70 years that a British refinery has been shut down due to a strike.
   
The dispute comes at an awkward time for British Prime Minister Gordon Brown, ahead of local elections on Thursday in which opinion polls suggest his governing Labour Party could struggle.
 

Date created : 2008-04-28

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