The closure of Scotland's only oil refinery helped leave the country more exposed to soaring heating oil costs by making it reliant on imported fuel, it has been revealed.
Some 127,000 Scottish households that rely on heating oil suffered Britain's biggest average price rise after conflict in the Middle East disrupted global fuel supplies, with prices jumping by 44p a litre in a month.
Industry evidence submitted to the Competition and Markets Authority said the closure of the Grangemouth refinery had a "major impact" on Scottish fuel distributors and left Scotland "solely reliant on imported fuel" for the first time.
The CMA concluded Scotland was particularly vulnerable because it has fewer fuel supply points, relies more heavily on imports and has smaller, less reliable fuel terminals than elsewhere in Britain.
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Why is the Grangemouth refinery so important?
It is home to Scotland’s only crude oil refinery through a joint venture between Sir Jim Ratcliffe's Ineos Group and China’s state-backed PetroChina.
It is symbolic of Scotland's 'black gold' which would be used by the Scottish National Party during the 1970s in making their economic case for independence from the rest of the UK. It was argued that North Sea oil would not benefit the nation to any significant degree while the nation remained part of the United Kingdom.
The first oil in the North Sea was said to have been discovered in September 1969 by the Sea Quest drilling barge in what was then known as the Montrose field. And on October 20, 1970, it was reported that, thanks again to Sea Quest, BP had struck oil, 110 miles east-north-east of Aberdeen, in what was believed to be its biggest discovery so far.
When the first oil was piped ashore from the North Sea to what was then BP's refinery in Grangemouth 49 years ago, it was, said the Queen, "a day of outstanding significance in the history of the United Kingdom".
Watched by eminent figures including Labour’s Prime Minister Harold Wilson, and company executives who had played key roles in Britain's new role as an oil-producing power, the monarch presided over the the historic switch on.
The ceremony took place on Monday, November 3, 1975, in a vast, specially-designed marquee at Dyce, near Aberdeen, the control centre of the pipeline between BP's Forties Field and the refinery, 237 miles away.
The Queen, flanked by B.P. chairman Sir Eric Drake and Mr Colin Smith, presses a button in the control room at Dyce, near Aberdeen, to launch the flow of oil from the Forties Field in the North Sea to BP's Grangemouth refinery 237 miles away
'Britain back in the black', read the main headline in what was then the Glasgow Herald the following day and the article read: “The black that is expected to take Britain out of the red is in Scotland. Just after noon yesterday the first oil to be piped ashore from the North Sea entered the Grangemouth refinery of British Petroleum."
Away from its symbolic significance, it is said to have the capacity to produce around 7 million tonnes of fuels and 1.4 million tonnes of petrochemicals every year.
It produces a range of fuels including petrol, diesel, kerosene, LPG and jet fuel and currently employs around 500.
It is the primary supplier of aviation fuel for Scotland’s main airports, and a major supplier of petrol and diesel ground fuels across the central belt.
It remains connected to the Forties Pipeline System (FPS) for crude oil intake from the North Sea and connected to Finnart Ocean Terminal for crude oil import and finished products export.
How did it all start?
The history of Grangemouth dates back to long before oil was discovered in the North Sea in the mid-20th century when industrial pioneers led by a Glasgow-born chemist named James Young worked out how to extract mineral oil from the rich coal and shale deposits in Scotland.
The first oil works in the world were opened in Bathgate in 1851 producing oil from shale or coal.
The network of small refineries that sprang up in the area shipped some of their output from the docks at Grangemouth.
In 1919, BP, then known as Anglo-Persian Oil, acquired Scottish Oils, a group that included Young’s Paraffin Light and Mineral Oil, and drew on its skills to help build its refinery at Grangemouth in the early 1920s.
Bob McLean at BP Grangemouth with first sample of Forties Field North Sea oil, on November 3, 1975
BP was persuaded to locate at Grangemouth rather than in north-east England due to its flat ground to the east, its transport links and most importantly, the rich vein of labour skilled in shale oil refining.
By 1924 the refinery was in operation. It maintained a throughput of 360,000 tons per year until the outbreak of war in 1939 when imports of oil dwindled and forced it to close.
It reopened in 1946 to a world even more hungry for refined oil products. This demand made it essential for economic reasons that the crude oil was utilised completely, and this led to the growth of the petrochemical industry.
What has happened since?
The following decades saw BP build and expand the adjacent petrochemical plant, which benefited from the development of North Sea oil in the 1970s.
Oil and gas from dozens of North Sea fields comes ashore next door through the Forties pipeline, which is still operated by BP.
The plant converts byproducts from oil and gas into industrially valuable chemicals like ethylene and propylene, as well as polyethylene for plastic bottles and food wrap and polypropylene for pipes and carpeting.
During BP’s reign in Grangemouth was a classic company town. To house employees at subsidized rents, it built rows of semi-attached gray stucco houses that are placed right up to the edges of the plant.
In 2017, Sir Jim Ratcliffe's Ineos announced the acquisition of the Forties Pipeline System from BP. That acquisition reunited North Sea and Grangemouth assets under Ineos ownership.
It is reputedly the UK's second-oldest, supplying refined products to customers in Scotland, northern England and Northern Ireland.
Why was it put under threat?
Staff were told in November, 2023 by executives at the Petroineos plant in Grangemouth that Scotland "simply won't be big enough to support a fuels refinery" due to falling demand.
Refining stopped in April 2025.
What efforts were made to save it?
Unions and some politicians had been fighting to save the Grangemouth refinery, believing that it still served a useful purpose and was seen by them as profitable.
Scots ministers spelt out hopes of Scotland becoming 'world leaders' in sustainable fuel production through the closure of the refinery and later called on the UK government to nationalise it.
The UK and Scottish governments were both behind a £1.5m Project Willow feasibility study report which laid out the potential future of the site in areas such as sustainable aviation fuel.
The study said Grangemouth must switch to green energy to meet its vast need for power, and then use that to produce new sustainable products.
But it also said this would require around £3.5bn of private investment.
Despite attempts to save the refinery, it stopped processing crude oil in April after a century of operations.
Petroineos had at that point moved to setting up an fuel import terminal, as it first set out in 2023, and it was operating for several months in parallel with refinery cessation activities.
What did the Scottish Government say?
The SNP had called for the UK Government to nationalise the site.
First Minister John Swinney said the end of refining at the plant was a "very sad day for Grangemouth, and for the country more generally".
He added: "We have said all along that this decision was premature, fundamentally short-sighted and detrimental to the transition to net zero.
"Our calls for the UK government to step in and try and maintain operations have gone unheeded so far."
The refinery on the site was converted into an import terminal earlier this year, with the loss of more than 400 jobs.
What was the UK Government's response?
The UK's energy minister said earlier this month that there was a “certain inevitability” that it would close by the time Labour came to power last year.
Michael Shanks said the UK Government “did not take any option off the table” when asked about whether Scotland’s last oil refinery could have been nationalised.
But he said the plant was “far too far down the line” for the outcome to have been averted.
Mr Shanks, who is the MP for Rutherglen and Hamilton West, said the government was “not in the business of nationalising failing businesses”.
However, he also described Grangemouth currently as a “hugely investable opportunity” for businesses.
Prime Minister Sir Keir Starmer previously announced £200 million in funding for the future of the site, cash which he hopes to triple in private investment.
That came after the Scottish Government had announced £25 million in funding.
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