**Petroineos to Permanently Close UK’s Oldest Refinery in Scotland**
Petroineos, the operator of the 150,000-bpd Grangemouth refinery complex in Scotland, has announced plans to permanently shut down the facility by the end of second-quarter 2025. This decision reflects a broader trend of declining profitability in the industry, particularly for older refineries unable to compete with more modern and efficient sites globally.
Located on the Firth of Forth in Scotland, Grangemouth has been the UK’s oldest refinery since its construction in 1924. Despite its historical significance and integral role in Scotland’s fuel supply chain, the refinery has faced significant financial strain over the past decade. Annual costs to maintain and repair the facility have consistently exceeded earnings, a challenge exacerbated by the global pandemic and shifting market dynamics.
The impending closure is attributed to a combination of global market pressures and the ongoing global energy transition. Petroineos explained that the refinery is unable to economically compete with more efficient facilities in regions such as the Middle East, Asia Pacific, and Africa. Additionally, the prospect of a probable ban on new gasoline and diesel cars in coming years is likely to further reduce demand for conventional products.
As part of operational transition plans, Petroineos aims to transform the Grangemouth site into a national distribution hub for finished fuels. This transformation includes ceasing all conventional crude processing operations and repurposing the facility to handle finished fuel imports and distribution. The company has estimated that this new configuration will safeguard fuel supply for Scotland by ensuring a stable and reliable distribution system.
Frank Demay, Chief Executive Officer of Petroineos Refining Ltd., emphasized the strategic importance of this transition: “Our action to create an import terminal will ensure fuel supply for Scotland. We expect Grangemouth to be ready to operate as a national distribution hub for finished fuels in the second quarter of 2025.”
INEOS, the parent company of Petroineos, has separately indicated that