There have been reports of motorists 'panic buying' fuel

A two-day strike by up to 1,200 workers at the Grangemouth refinery near Falkirk will now go ahead on Sunday and Monday, threatening fuel supplies.

Shortages across Scotland and northern England have been predicted after negotiations between union officials and employers collapsed.

Petrol firms have been accused of profiteering by motoring organisations which claimed filling stations had begun to "cash in" on the growing uncertainty by raising prices.

The RAC foundation said it had heard reports of filling stations across the country pushing up prices, with diesel at one filling station costing £1.45 per litre.
advertisement

Motorists are already struggling with record petrol prices pushed up by the steeply rising cost of crude oil.

The average price of a cost of diesel was yesterday a record 118.9p per litre, while unleaded has reached 109.1p per litre.

Rodney Kumar, a spokesman for the RAC Foundation, said: "We have heard reports that prices are rising more than they probably need to be.

"It is really just a knee jerk reaction and if retailers are cashing in on it is unnecessary, because it only makes things worse for everyone."

While there is no shortage at present, motoring groups fear that panic buying will be triggered by memories of the shortages caused by fuel blockades in 2000.

The first signs of panic buying have been reported in Scotland, but could soon spread south of the border.

Douglas Robertson, chief executive of the Scottish Motor Trade Association, said some garages were running dry because people were stocking up on fuel.

He said: "I wouldn't say it's the panic-buying stage yet, but people are buying more than they normally buy - they are going beyond their normal £10 or £20 cycle and filling a tank.

"Fuel stations work on a just-in-time basis so if they are due a delivery on Thursday and sell three times as much on Tuesday they will run out on Wednesday.

"I think when people see empty pumps and they think there must be shortages and they search around to get it and they use up more fuel looking for fuel."

A spokeswoman for petrolprices.com, a price comparison website, added: "It may only be a minority of stations who are increasing their prices but the threat of a shortage could become a self fulfilling prophecy."

The website predicts further petrol prices increases, whether the strike takes place or not, with crude oil prices taking prices to £1.50 per litre.

A petrol station in Kirkcaldy, Fife, confirmed it had briefly charged £1.45 a litre for diesel on Monday, with unleaded at £1.25, but said the high prices had been a computer error and had since been dropped.

Ineos, the owners of Grangemouth, has said the industrial action could mean no fuel supplies in Scotland and the North of England for at least a month.

The Scottish Government said it was "very disappointed" at the development, but said it had contingency measures in place.

These will be outlined by finance secretary John Swinney in the Scottish Parliament today.

Officials from Unite met for the past two days with management from Ineos, which owns Grangemouth, at the conciliation service Acas.

But the union announced last night that the talks had failed to find a breakthrough in a dispute over pensions.

Courtesy of the Telegraph at http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/04/24/npetrol124.xml