Soaring diesel prices underline UK gov's failure over Grangemouth
With diesel prices now averaging just a shade under £2 per litre, Scots feel angry all over again about the closure of the Grangemouth refinery. Farmers, crofters, road hauliers, fishermen and businesses in the Highlands and Islands are all suffering disproportionately compared to many of their counterparts in the rest of the UK.
The UK Government ignored dire warnings about the impact on energy security when they failed to step in to save Scotland’s last refinery.
For decades, North Sea Oil was pumped directly to Grangemouth to be refined. Until it started to close down three years ago, it refined about 60 per cent of all the petrol and diesel used in Scotland. Now most of that has to be reimported from European traders in a global dollar market - that is pushing prices higher than they would otherwise be.
Grangemouth has also directly impacted the high costs of heating oil, which 5% of Scottish households rely on to heat their homes. According to the Competition and Markets Authority prices in Scotland rose faster than in England, Wales or Northern Ireland. It said Scotland was particularly exposed because it has fewer fuel supply points, now depends more heavily on imports and has smaller, less reliable fuel terminals than other parts of Britain.
Scunthorpe was saved - but not Grangemouth
When it came to saving a British Steel plant in Scunthorpe, the UK government stepped up and found £1.5 billion. It said it was a matter of national infrastructure. Unlike the steel plant at Scunthorpe, Grangemouth was not loss-making. It turned a profit in its last years of operation.
But Grangemouth’s owners - PetroChina and Ineos - preferred to open a plant in the EU where it would have easy access to the world’s biggest economy. While Westminster claimed it didn't have the funds to step in and save Grangemouth, it emerged that the UK Government’s own export credit agency handed a staggering £600 million (€700 million) financial backing guarantee to INEOS billionaire Jim Ratcliffe to build the new plant.
In 2025, when the UK government announced it was going to step in and save Scunthorpe, many argued that Grangemouth should get the same treatment. In an article entitled “Grangemouth closure is a threat to UK energy security”, Iain McWhirter wrote: “The UK government made a convincing case for taking back control of steel. I do not see how it can now avoid the logic of doing the same for Grangemouth, if we are to avoid energy servitude. To relinquish this asset in the face of the current international reset is folly.”
Stephen Flynn said at a House of Commons debate on the Scunthorpe rescue: "In the Scottish context, many minds right now will be focused on the situation in Grangemouth... How can the Government argue that one industrial asset is vital for UK national security and energy security, while standing by and letting Scotland's only refinery close?"
Flynn also predicted that a £200 million pledge of investment from the UK government into a future for Grangemouth would never materialise - he has been proved right.
Grangemouth funding disappointment
A proposal to make Grangemouth a hub for green aviation fuel was covered by Business for Scotland in 2024. A sustainable aviation fuel sector would need new market mechanisms - the £200 million sweetener from Westminster would only come as part of a multi-billion-pound package of private investment. Westminster holds all the levers to attract and manage this kind of investment. It has not chosen to use them.
Scottish Labour MP and erstwhile Better Together campaigner Blair McDougall told The Scotsman recently that the money from Westminster was on hold because of work needed to clean up the site. He must know that is only a small part of the problem - yet he didn’t mention the rest. Unionist fanzine The Scotsman swallowed the story without question. They did not ask anyone with any knowledge of the situation to comment.
We reported recently on how this funding disappointment is just one more sign of how the UK government is killing Scotland’s just transition to renewables, one failure at a time.
We have been here before
It is no secret that Scotland’s oil bounty was mismanaged. It has not been used to benefit Scots or to secure our future. Instead, it was squandered. The UK still takes tax from the sector and at the pump - but when investment is needed in Scotland’s infrastructure, it is not forthcoming. Westminster takes but it does not give back.
Grangemouth is just one more example. It should have been obvious that refining North Sea oil into the kinds of fuels that Scotland uses every day was a key piece of national infrastructure. Yet while billions in state subsidies were funnelled to English manufacturing to preserve domestic capacity at Scunthorpe, Grangemouth was starved of investment.
Scotland has seen this kind of failure over and over again from Westminster. It does not have Scotland’s best interests at heart. Now we are paying the price - literally - at the forecourts and when we buy heating oil. Only as an independent country can Scotland get governments which focus on the wellbeing of Scottish families and businesses.