UK

Oil at record high as British refinery strike continues

Article published on the 2008-04-28 Latest update 2008-04-28 16:30 TU

Grangemouth employees on strike
(Photo: Reuters)

A 48-hour walk-out by some 1,200 workers at Grangemouth, west of Edinburgh, Scotland, has forced Britain's energy giant BP to shut down the Forties pipeline, which supplies 40% of the country's oil and gas. Britain's offshore energy industry body, Oil and Gas UK, estimates that the pipeline closure will cost the domestic economy £50 million (€63 million) per day in lost production.

The government has said that it has enough reserves, but people in Scotland and northern England went to stock up at the pumps anyway. Some petrol stations started rationing and increased prices.

Paul Stevens, an energy economist a Chatham House, the British think tank, told RFI that there are plenty of oil products in the UK, but the problem comes when people panic. "The difficulty is that when this sort of story gets into the news media, people start to panic," he said. "The panicked reaction causes a problem."

The strike is over a pension reform dispute, and it does not seem likely to be resolved soon. This is the first time in more than 70 years that a British refinery has been shut down due to a strike.

Meanwhile, the pipeline shut-down has contributed to a record high in the price of crude oil, which got close to $120 (€77) per barrel.