AA tries to head off panic at pumps after oil hits record

AA tries to head off panic at pumps after oil hits record

Terry Macalister
The Guardian, Tuesday April 22 2008

Oil prices hit new records at more than $117 a barrel yesterday in the face of a string of supply problems, including a decision by one of Britain’s largest refineries to start shutting down in the face of a threatened two-day strike over pensions.

Fears of fuel shortages and higher petrol prices encouraged the business secretary, John Hutton, to promise the government would do everything it could to ensure that the dispute at the 200,000-barrels-a-day Grangemouth plant did not disrupt motorists.

US light crude hit $117.40, while London Brent oil reached its own all-time peak of $114.65, as traders worried at comments from Ineos, the owner of Grangemouth, that the closure would have a “significant impact” on the Forties pipeline that serves a number of North Sea fields.

Global crude prices were driven up also by Shell confirming that it had been forced to shut some production in Nigeria after an attack by rebel groups on two of its pipelines, and Opec saying it saw no reason why it should increase its output.

Iran’s oil minister, Gholamhossein Nozari, followed the line given by the cartel at the weekend when he said yesterday that oil prices were not too high in real terms, suggesting that the headline number appeared so large mainly because of the weakness of the dollar.

But Nobuo Tanaka, head of the Paris-based International Energy Agency, said that prices were too high for consumers and were particularly punishing for developing nations.

Up to 1,200 members of the Unite union are due to strike on Sunday and Monday in protest at plans by Ineos to end the company’s final-salary pension scheme for new workers and to make other pension changes. Hutton urged the company and the union to reopen negotiations. “If the strike does go ahead, we will do everything in our power to minimise disruption. We have contingency plans in place, and today I have activated the first stage of those plans.”

Last night, it emerged that both sides would convene this morning at Acas for conciliation talks. But in the meantime, Ineos has started shutting down the refinery and warned of shortages from Friday if the strike goes ahead.

The AA told motorists there was enough fuel available even if the strike did go ahead, as long as they filled up only when they needed petrol. “The last thing we need is panic at the pumps,” said the AA’s president, Edmund King. “Problems can arise if every motorist with a half-full tank decides to fill up early.

“With 30m cars on the road, this means, if half of those fill up when they don’t need to, an extra 375m litres of fuel would be required. That would lead to shortages.”

http://www.guardian.co.uk/business/2008/apr/22/oil

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