Petroineos’s announcement of the closure of the Grangemouth oil refinery might have been all but inevitable but it was absolutely grim nonetheless.

The closure, which the 50-50 joint venture between PetroChina and INEOS had signalled last November, will result in the loss of about 400 of the 475 jobs at the refinery.

Petroineos, confirming its “intention to cease refinery operations at Grangemouth during the second quarter of 2025”, on Thursday highlighted the losses recorded by the refinery in the years since 2011.

It also flagged the age and layout of the refinery, which can trace its roots back to 1924, in the context of the capital expenditure required.

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And it put the decision in the context of the energy transition.

It all made for demoralising reading, and did nothing to raise hopes that the refinery could yet be saved.

Petroineos declared: “Grangemouth is the UK’s oldest refinery and currently faces significant challenges due to global market pressures and the energy transition. Refining is a globally competitive industry and Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa.

“Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate. This annual outlay on essential planned maintenance and running repairs has been consistently higher than the company’s earnings over the past decade.”

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It added: “Petroineos is a joint venture between INEOS and PetroChina and those shareholders have invested more than $1.2bn since 2011 to maintain the refinery’s safe operation, recording losses in excess of $775m during the same period.”

These losses are large, although it is worth noting that they are the total sustained over a very lengthy period.

Frank Demay, chief executive officer at Petroineos Refining, declared: “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.”

The closure of the refinery, one of Scotland’s most famous industrial sites, and the consequent loss of jobs is a bitter blow, even if it had looked inevitable in the wake of last November’s announcement from Petroineos.

And the Federation of Small Businesses swiftly highlighted the knock-on effect of the planned refinery closure on jobs “the length and breadth” of Scotland.

Hisashi Kuboyama, development manager for the west of Scotland at the Federation of Small Businesses, said: "Although not unexpected, the Petroineos closure is nevertheless devastating news which will be felt well beyond the refinery gates.

"The knock-on effect on the supply chain will have an impact on numerous small businesses across the length and breadth of the country, putting many more jobs than the 400 on-site at risk.”

My column in The Herald on the impending closure of the refinery observed: “There is in such situations rarely anything that politicians can do when companies make decisions on cold financial grounds, as all big businesses do.

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“Diageo’s closure of the Johnnie Walker whisky bottling plant at Kilmarnock was a classic example of this. Back in 2009, then First Minister Alex Salmond even marched with thousands of other people to try to save the jobs at the Kilmarnock plant but all of the attempts to avert this closure were in vain.”

The column went on: “Going further back, the closure of the state-owned Ravenscraig steel plant in Lanarkshire, which had such a grim effect on the areas around it, had a sad inevitability about it as it unfolded in demoralising chapters.

“Working in the area shortly after this closure, there was no escaping the devastation to the local economy and to people’s lives that followed the demise of Ravenscraig.”

The column concluded: “While the closure of the refinery might have been inevitable given the energy transition, global market forces, and the cold financial decisions of major companies, that does not make it any less devastating.”

Elsewhere, the new Labour Government’s early decisions have again been in focus in the last week.

On Tuesday, the new Government’s move to means-test the winter fuel payment for pensioners, which will see about 10 million people lose out on this £200 or £300 help with high electricity and gas bills, prevailed in a House of Commons vote.

The Conservatives had put a motion to challenge this, and there appeared to be a mini-rebellion by some Labour MPs, but the Government’s move to save an estimated £1.3 billion in the current fiscal year to March and £1.5bn a year thereafter goes ahead as planned.

Not surprisingly, the move has caused huge controversy.

And what is perhaps most remarkable about the decision by Labour is the relatively small amount it expects to save from such a contentious measure.

As my column in The Herald on Wednesday observed: “To put the projected £1.3bn saving in 2024/25 in context, it is less than 4% of the £33.5 billion a year which the protracted freezing of income tax thresholds by the UK Government is expected to raise in 2028/29. These thresholds have been frozen since 2022/23. And, given the UK’s inflation crisis, this move to freeze thresholds rather than increase them in line with inflation is already in the current fiscal year raising tens of billions of pounds.”