‘Not value for money: UK minister rules out propping up doomed …

Hundreds of jobs are set to be lost in the move which is expected to take place in the spring of 2025.

In November, Scottish Energy Minister Neil Gray told Holyrood that he remained hopeful he could “extend the potential life” of the refinery.

MSPs heard in December that the refinery will need to pay £40 million for a licence to operate beyond May 2025.

But the UK Government has now confirmed it has no intention of intervening - warning it would not give taxpayers a good deal.

UK Energy Security Minister Graham Stuart told Holyrood’s Economy[1] Committee that the UK Government has known that Petroineos had been struggling for some time to keep the plant profitable.

Committee chairwoman, Labour MSP Claire Baker, warned that the news[2] of the impending closure came as a shock to MSPs.

She said: “This announcement appeared to be quite sudden and the timescales that were initially reported are quite short.

“There are concerns that this will have a negative impact on the local community, particularly the supply chain.”

Mr Stuart insisted the UK Government was not told of the closure decision until November 23 last year, but revealed “what we were aware of is that they weren’t making money and neither were they making investments in order to change the site and make it profitable”.

Scottish Labour’s energy spokesperson, Colin Smyth, pointed to the suggestion that the Scottish Government was previously made aware of Petroineos’ intention to close the plant and asked if the UK Government had also been given advance notice of the action.

Mr Smyth said: “It has been suggested in recent days that the Scottish Government held talks with Petroineos two years ago in which the then Scottish energy secretary Michael Matheson was warned of the potential closure of the refinery because of the market pressures the company faced.

“Would it be fair to say the UK Government were aware two years ago of the potential closure of the refinery because of these market pressures?”

But Mr Stuart suggested that the Scottish Government were possibly “given more specific information”, as he stressed: “We didn’t know of any specific plans.”

He added: “We were aware it was a non-profitable asset and it was possible they would look to close or change it at some point.

“But I don’t think that had been said in terms.”

The minister was pressed about guarantees for the workers whose jobs are at risk to move into green industries by the time the plant closes.

But Mr Stuart stressed he “can't give cast iron guarantees” that workers can transition into green jobs in time.

In response, Mr Smyth added: “What is the UK Government able to do to ensure those opportunities in the Grangemouth area… particularly for those supply chain workers in that local community?

“A transition shouldn’t be about workers having to leave their community to find opportunities, we should be looking to create those opportunities in their local community.”

Mr Stuart was unable to give specific details, instead pointing to carbon capture plans for the north east, as well as the Forth freeport proposals and growth deals for Falkirk.

He insisted that “there is an enormous amount happening”.

Mr Stuart added: “Your question is probably better directed to the Scottish Government who have that kind of local responsibility.

“I would certainly want to send a positive message to the local community and the individual workers that we are standing behind them and working closely with the Scottish Government -not at knives drawn or some blame game – we’re actually working together, seeking to do our best to help them and the community generally.

“I’m positive and optimistic for the future."

SNP MSP Evelyn Tweed asked the minister: “What steps will the UK Government take to extend the lifetime of Grangemouth?”

But Mr Stuart told the committee that “subsidising operations at the refinery is unlikely to be value for money as it has been loss-making for several years”.

He added: “We’re working with Petroineos and the Scottish Government to understand all possible options for the future of the refinery.”

The minister highlighted that “Grangemouth is one of Europe’s oldest refineries”.

He said: “Public subsidy, as well as not necessarily making economic sense, would also likely draw legal challenge from its competitors in England and Wales well as elsewhere in Europe.

“They (Petroineos) haven’t approached us with a request for financial support. It is ultimately a commercial decision for Petroineos.

"We haven’t been asked to contribute and we don’t see…at the moment that it’s an obvious thing that we should be investing in.

“If Petroineos can’t see the commercial sense in investing in a refinery that they themselves have been unable to make profitable over a substantial period and which they say is inherently inefficient, I do not think that would be a sensible use of British taxpayers’ money.”


  1. ^ Economy (www.heraldscotland.com)
  2. ^ news (www.heraldscotland.com)
  3. ^ Sir Jim Ratcliffe's stricken Scots refinery incurred £360m in losses (www.heraldscotland.com)
  4. ^ SNP hopes to 'extend the potential life' of Grangemouth oil refinery (www.heraldscotland.com)
  5. ^ SNP ministers criticised for delayed Grangemouth just transition plan (www.heraldscotland.com)