Panic at the pumps, oil fields shut down - but what is this strike really about?

STONY-FACED and eyes staring straight ahead, the young man stormed forth from Scotland's largest oil refinery holding before him a T-shirt emblazoned with the slogan "Fighting for our Pension".

Brimming with an anger fanned by the Unite union meeting ahead of tomorrow's strike that will cripple the country's fuel and energy supplies, he yelled: "Management are telling lies."

Two hours earlier, Tony Woodley, the union's general secretary, up from London to rally the troops, had accused the plant's owners, Ineos, of being "hellbent on having a dispute". But even as he spoke, questions were being asked as to the justification for an industrial action that will cost the UK economy £50 million a day in lost oil and gas production.

The dispute is about pensions – but it emerged yesterday that the proposals will affect only new employees who will be unable to join the final-salary scheme. Ineos' plans to make existing staff contribute to the scheme have been put on hold to let an independent actuary assess them. Unite was accused of "living in La La land," fighting a "political battle" on "a philosophical principle".

While motorists continued to lay siege to rapidly diminishing stocks at the forecourts, farmers said their concerns were "growing by the hour" – and there could be implications for animal welfare and food supply.

Grangemouth workers – who earn an average of £40,000 – are to walk out for 48 hours, forcing the closure of the site.

Crunch talks with the conciliation service Acas broke down earlier in the week and now the oil giant BP is preparing to shut down its Forties pipeline at the nearby Kinneil site, which will paralyse about a third of UK oil and gas production, as it relies on power from Grangemouth. Last night, Tom Crotty, the Ineos chief executive, said: "Ineos has addressed the issues for existing staff, so now the union say the dispute is about future staff. Unite are asking their members to strike in support of non- existent colleagues."

Last night, an Edinburgh-based pensions expert said: "Unite are living in fantasy land. The changes are fair and reasonable. Ineos employees need to get into the real world; all pension schemes are going into defined contribution schemes because it's very expensive for a company to fund non-contributory final-salary schemes.

"You can't have a free ride and expect the company to pay an extreme amount of money to give these benefits to a final-salary pension scheme. I think Ineos workers are in a little La La land."

John Sansone, a practice manager in employee benefits at Towry Law, said Ineos was following a private-sector trend. He said final-salary schemes had become "financially unsustainable" for a number of reasons, such as increased longevity and mounting pensions legislation. "It doesn't sound as though Ineos is doing anything out of the ordinary," he said.

Professor Emeritus Zander Wedderburn, an Edinburgh-based trade unions expert, said the dispute was "interesting" because it involved a union "standing on a principle about people who are not its members".

He said that the hefty paypackets enjoyed by the Grangemouth workers meant

"they can afford to take a couple of days without pay, but the consequences for the country and the company are utterly horrendous.

It's a potential, rather than a present, members' grievance."

Ineos said it had been four months into a six-month consultation with the union and it had called the strike a day before a meeting on the pensions' deal.

A spokesman added that the firm had already made changes to its initial plans on the back of union demands and had agreed to phase in the 6 per cent employee contributions over six years rather the original three.

A Scottish Conservative spokesman said: "The fact this dispute centres around people who are not even employed yet will bemuse members of the public who will be facing the consequences of the strikes."

However, Mr Woodley insisted that there was "no justification for what the company is proposing because it is profitable and the Grangemouth site is profitable". He added: "After the strike, we have a pause for peace and I hope we can resume negotiations to resolve this."

He said he had invited Ineos to hold more talks, but these were now not expected to be held before the strike starts. He said that if the company remained "intransigent", then an escalation of the dispute was "inevitable".

Alex Salmond, the First Minister, stepped in yesterday to try to bring a solution to the dispute by speaking to Jim Ratcliffe, the chairman of Ineos, and Phil McNulty from Unite.

"I made it clear that if there is to be any real solution to this dispute then they need to get back around the table," he said. "I believe that the two-day strike is certain now."

He said ministers must take a lead in conserving petrol and that fuel supplies would be coming from Rotterdam and Gothenberg, via Grangemouth, with BP is also releasing further supplies. "Supplies are washing around Scotland," he said. "We will have more than enough in the next week. There have been some areas which have experienced shortage, especially some rural locations with diesel, and these have been dealt with."

Meanwhile, fuel prices continued to rise – some by 5p a day – and some petrol stations ran dry.

The UK government has already activated its fuel-shortage contingency plan and last Monday allowed fuel suppliers to talk to one another to facilitate provision. Such activities are normally outlawed under competition legislation.

A situation room has been set up at Whitehall this weekend to monitor the situation and instigate further measures – such as prioritising emergency vehicles or setting limits on how much can be bought at the pumps.

Back at Grangemouth, on the roof of the admin building behind Mr Woodley, the white Ineos company flag fluttered in the wind, but it certainly was not one of surrender.

Those filing into the meeting refused to stop and discuss the details of the pension scheme at the heart of the dispute. However, one worker said: "They are making millions, but they want to take our money."

A young apprentice said: "I am just finishing my apprenticeship and I want to see what it's all about as I'll be in the new pension scheme."

Pat Rafferty, the senior regional industrial organiser for Unite, said support for the strike was "rock solid".