Michelle Thomson, the Scottish parliament member for Falkirk East, which covers Grangemouth, said the closure would be a disaster for local people. She has raised an urgent question in the Scottish parliament and is talking to local unions.
She said: “The Scottish government must support those individuals and families whose livelihoods are under immediate threat. But governments need to undertake an urgent and thorough analysis of the wider impact, not least to both downstream and upstream supply chains.”
The Grangemouth site accounts for about 4pc of Scottish GDP, employing about 2,000 people directly across three different businesses, plus up to 7,000 contractors.
Analysts say, however, that the sheer costs make keeping Grangemouth’s refinery in business unrealistic – especially with its most profitable hydrocracker unit no longer in action.
Alan Gelder, vice-president and lead analyst for refined products at Wood Mackenzie, said production has been compromised by breakdowns.
“At the start of the year we did our [regular] analysis on closure risk, and didn’t see a high risk of closure in the near term,” he says. “But in April, the hydrocracker unit which produces a lot of diesel went offline and hasn’t come back.
“That hits the profitability of the refinery very hard. Global refining profit margins are expected to weaken next year so they might well have doubts about how much money they need to spend and how effective that would be. So all those things have come together for them to say, actually, let’s just stop processing crude and convert it into an import terminal.”
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