Ministers appealed for calm yesterday as the prospect of a 48-hour strike at a massive oil refinery threatened to trigger panic-buying at petrol stations in Scotland and northern England.

Britain's third-largest refinery, at Grangemouth near Edinburgh, will shut down tomorrow and is unlikely to return to full capacity for up to three weeks, with the loss to production of millions of barrels of oil.

With the possibility of 50 North Sea oilfields stopping production if the main Forties Pipeline System is forced to close, ministers north and south of the Border were last night facing the prospect of an economic fallout as well as disruption to fuel supplies.

Amid mounting concerns about panic-buying by motorists and profiteering by petrol stations, the Scottish Executive announced last night that it would co-ordinate events from its “Emergency Room” in Edinburgh, while John Hutton, the British Business and Enterprise Minister, told the Commons that the situation would be closely monitored.

Mr Hutton said: “It is the UK Government's absolute and firm responsibility to make sure that there is continuity of supply, that emergency services are protected first and foremost and that we do everything in our power to make sure we minimise the wider impact in Scotland.”

He disclosed that oil companies had reported “significant” increases in fuel demand from motorists, but emphasised that there was no imminent danger of stocks running out. “Over the last few days significant additional supplies of imported fuel have been made available in Scotland,” he said. “I have been advised by the industry that there is sufficient fuel to re-supply forecourts and other users ahead of the planned industrial action.

“Industry has also advised us that, at present, fuel stocks at Grangemouth, together with planned imports of finished product through Grangemouth to replace lost production, should be sufficient to maintain supplies through the period of the industrial action and the consequent re-starting of the plant.”

The refinery at Grangemouth, which is one of nine in Britain and the only one in Scotland, processes 210,000 barrels of crude oil a day, or 10 million tonnes a year. It supplies Scotland, Northern Ireland and parts of northern England, including Northumberland and Cumbria.

Some 1,200 workers have said that they will walk out on Sunday in a dispute over changes to their pension schemes, and in anticipation of the two-day strike the Grangemouth site has been steadily phased down since last Friday. Ineos, the company that owns the site, estimates that it will not operate at full capacity for several weeks.

Alex Salmond, the Scottish First Minister, said that there were sufficient stocks of all types of fuel in Scotland to last into May, while there was also the possibility of importing more from refineries elsewhere in Britain - an embarrassing prospect for a man who has built his political career on Scottish independence.

While it is believed that some “finished-product” fuel is stored at Grangemouth, it is understood that further stocks are held in Inverness and at a depot on the west coast. Across Britain, it is believed that there are enough fuel stocks to last for 70 days.

Mr Salmond yesterday urged motorists not to panic, adding that Scotland “can cope with this difficulty”. He called for people to behave sensibly and responsibly by avoiding nonessential trips and using public transport where possible. “Assuming that consumer behaviour is responsible, then there should be limited difficulties in terms of both inconvenience and disruption,” he said.

In an emergency statement at Holyrood, John Swinney, the Scottish Finance Secretary, said that the emergency services across Scotland were considering the possible impact of the fuel shortages. He said: “The strike has the potential to affect all sectors of Scottish society and economy. We are therefore taking this issue extremely seriously. We are confident that, with goodwill on all sides, there will be enough fuel to keep Scotland moving. There are ample supplies of fuel available in Scotland into May and we anticipate that stocks can be maintained.”

He added: “It would clearly be unacceptable if any retailer were to take advantage of the potential of localised fuel shortages and increase prices. I would call on all retailers to ensure that increased prices are avoided at all costs.”

In a potentially more serious blow, up to £50 million a day — including £25 million to Treasury coffers — is likely to be lost if the Forties Pipeline System is forced to shut down as a result of the strike. The move would stop a flow of 700,000 barrels of oil a day, from about 50 offshore fields, equivalent to 20 per cent of total North Sea production.

Steam and electricity from the Grangemouth refinery are essential to operations at the nearby Kinneil processing plant, where crude oil from the Forties pipeline is stabilised by removing sulphur and extracting gas. Unless Ineos is able to give assurances that it will supply basic utilities to Kinneil, oil and gas production from the Forties sector of the North Sea is likely to come to a halt within the next 24 hours.

Operators from across the industry urged both sides in the dispute to heed the Government's appeal for a swift resolution. A spokesman for BP, which owns the Forties Pipeline System, said that his company was seeking urgent clarification from Ineos about the effects of the dispute on the Kinneil plant. He said: “It is a difficult situation. Without essential services we would be unable to continue operations. All we can do at the moment is make the preparations for a possible shutdown and keep pressing them for information. We hope to get an answer soon, especially with the strike due to start on Sunday morning.”

Industry experts said that the Forties Pipeline System would have to close at least 12 hours before any closure of Kinneil. That process is likely to begin today if Ineos is unable to give assurances over the supply of utilities to Kinneil. As soon as a shutdown begins, up to three days of North Sea production will be lost. “If there is nowhere for the oil and gas to go, production has to stop from the field. But once you have shut down production, it can't be turned back on at the flick of a switch. It will take two to three days,” said a spokesman for Oil & Gas UK, the organisation that represents the offshore oil and gas industry.

Although there was little evidence of panic-buying at the pumps, Lothian Buses in Edinburgh announced yesterday that it did not expect to be able to run any services after Sunday evening, because BP was prioritising deliveries to petrol stations.

A short time later the Scottish Government said in a statement that there had been a misunderstanding and that the bus company would receive diesel from BP. Lothian Buses gave reassurances that its fleet would be fuelled and services would run as normal.

BP said yesterday that it was withdrawing a promotion on its forecourts in Scotland and the north of England, after fears that it might encourage drivers to unnecessarily fill up their cars. Customers had been offered double points on the Nectar loyalty card scheme if they bought at least ten litres of fuel within a week of visiting a BP garage.

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