Strike hits key British oil refinery

Workers at one of Britain's biggest oil refineries started a two-day strike on Sunday, forcing the closure of a major North Sea pipeline and triggering panic-buying of petrol.

The walkout by around 1,200 workers began at 6am (0500 GMT) at the Grangemouth refinery, west of Edinburgh, while the neighbouring Forties pipeline was closed down around the same time, operator BP said.

The key pipeline brings more than 700,000 barrels of crude oil ashore every day and supplies around 40 per cent of Britain's oil and gas plus international markets. It cannot function without power and steam from Grangemouth.

The walk-out, organised by trade union Unite, comes in a row over pensions. Staff and families held a demonstration Sunday outside Grangemouth, which could take weeks to get fully up and running again after the strike.

Britain's main opposition Conservative Party has warned the strike will hit world oil prices, while the ruling Labour Party is urging calm and says there are enough stocks to last through the strike.

Many motorists, particularly in Scotland and northern England, are rushing to the pumps to try and stock up, despite official reassurances there is enough in reserve to go round if people keep calm.

Some petrol stations have introduced rationing or price hikes while others have run dry.

"There is plenty of petrol and diesel in Scotland to meet demand during this period of time," Business Secretary John Hutton said.

"But of course there is going to be a challenge if people change the way that they consume fuel."

The Scottish government, led by the Scottish National Party, is shipping around 65,000 tonnes of fuel -- mostly diesel -- in from Europe to keep supplies replenished during the action.

This should be enough to last about 10 days.

Offshore oil industry body Oil and Gas UK has urged politicians to intervene in the dispute, saying the pipeline closure will cost the economy $100 million dollars per day in lost production.

"It is now time for the UK government at the highest level to step in and take all the necessary actions to ensure that the country is not held to ransom in this manner," said chief executive Malcolm Webb.

Alan Duncan, business spokesman for the Conservatives, warned that the closure would hit world oil prices.

"The interdependence of our North Sea oil production and the refinery...has implications for global oil prices," he told Sky News television.

"So world oil prices have gone up and we're going to see local oil prices and petrol prices going up."

On Friday in London, Brent North Sea crude for June rose to $116.34 a barrel after earlier crossing the key $117 mark.

Some 70 oil fields feed into the Forties pipeline. Around two-thirds of oil from the pipeline is immediately exported.

North Sea oil platforms could be forced to shut down due to the action, a BP spokesman said, adding they would likely take a few days to get up and running again afterwards.

It is the first time in more than 70 years that a British refinery has been shut down due to a strike.

Prime Minister Gordon Brown has said there is no need for industrial action and urged both sides to return to the negotiating table.

The dispute comes at an awkward time for Brown, ahead of London mayoral and local elections on Thursday in which opinion polls suggest his governing Labour Party could struggle. (AFP)

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