The closure of Scotland’s last oil refinery is not linked to the drive to net zero, the Scottish secretary has said.
It was announced on Thursday that Grangemouth, one of only six UK refineries, would cease production in the second quarter of 2025.
Petroineos said the site has been making hundreds of millions of pounds worth of losses each year.
The owners said the Falkirk refinery faced “significant challenges due to global market pressures and the energy transition”.
From the second half of next year, it will be transformed into a fuel import terminal.
Asked on Friday if its closure is the price of moving to net zero, Ian Murray told STV News: “I don’t think we should connect these two things together.
“The refinery, as Petroineos has said in an open book way, has been losing a lot of money and they’ve made that commercial decision to close the refinery.”
The site is currently responsible for around 65% of refined oil products in Scotland, including petrol and diesel.
The Scottish secretary said Scotland and the rest of the UK would still maintain enough supply after the closure of Grangemouth.
The CEO of Petroineos pointed to the transition to green energy as one of the reasons for the plant’s closure.
Frank Damey said: “The energy transition is happening now and it is happening here.
“Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further.
“That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business.”
Murray said the site still had a “bright future” in the medium and long-term, and pointed to a joint £100m fund from the Scottish and UK Governments for the local community and workforce.
Murray added: “{The Grangemouth closure] is obviously devastating but this government has been in for nine weeks and we needed much more time to do something about this but what we have managed to put together is a £100m package for Falkirk and Grangemouth, and we have Project Willow which is about the future of this site.
“So the long-term future of this site and the medium-term future of this site is positive.
“It’s devasting for the workforce but Petroineos have to close the refinery and there’s no changing their mind on that.”
Tory MSP Douglas Lumsden accused the Scottish secretary of trying to “rewrite history”.
He said: “His party – along with the SNP – have abandoned the industry and the tens of thousands of jobs it supports.
“That attitude has undoubtedly put off key investors and we are now witnessing the devastating impact it is having on workers and our economy.
“In their efforts to assist those working and connected with Grangemouth, it would be welcome if Labour and the SNP both recognised that oil and gas still has a hugely key role to play in our energy needs, rather than continuing to turn their backs on the sector.”
John Swinney said there was anger within the local community about Petroineos’ “premature decision” to close the plant.
The First Minister said that he would work with the UK government to protect the local workforce and wider community.
“I think it’s a premature decision,” he said. “Diesel and petrol cars will be required for some years to come.
“What we now have to face up to is to find new opportunities or to expand the lifespan of the refinery.”
He said he was “determined” that the employees at the refinery will experience a “just transition”.
Only around 75 of the current 500 jobs at the site are expected to remain once it stops refining oil.
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