The UK Government’s plans to abolish import tariffs could lead to refineries – including Grangemouth’s Ineos – being forced out of business.
That’s the fear of Falkirk East MSP Angus MacDonald who was reacting to information contained in the leaked Yellowhammer Report.
He believes the removal of import tariffs in a no-deal Brexit would attract cheap fuel from Russia and other countries, which could have an impact on Grangemouth’s PetroIneos refinery, which currently supplies more than 80 per cent of motor fuels to the Scottish market.
According to the Yellowhammer Report, UK Government plans to set most import tariffs at zero per cent after a no-deal Brexit could “inadvertently” lead to disruption to fuel availability.
The report warns of refinery closures, as well as strikes and fuel shortages as Britain begins to rely on cheap imports.
Civil servants at UK level predict the imposition of zero tariffs on imports would lead to “significant financial losses” and the closure of two of Britain’s six main oil refineries.
The Scottish Government’s finance secretary Derek Mackay has spoken with his UK Government counterpart to raise his concerns and to highlight the need to ensure the Grangemouth refinery is not impacted negatively by a no-deal Brexit.
Mr MacDonald said: “I have written to Derek Mackay to highlight the impact a zero tariff on the import of fuel would have on the Grangemouth Refinery and the workforce here. I will also ask my MP colleagues – Martyn Day and John McNally – to raise the issue in the House of Commons upon their return from summer recess.
A Petroineos spokesman said: “As a business we are reviewing the detail of the proposed terms on which the UK will trade oil products, particularly in a ‘no-deal’ scenario. We have provided the Government with our view on the impact for Grangemouth, where, we believe, the main issue to be the imposition of the WTO tariff of 4.7 per cent on petrol and petrol component exports.
“The ‘zero’ tariff proposed on imports from across the world also creates a negative potential impact for UK refiners.”