Fears of gas price hikes as key pipeline shuts and 1,200 workers walk out

Staff at Scotland's main fuel supplier stopped work at 6am in a dispute with operators Ineos over proposed changes to pensions.

The plant has been shut down along with a major BP pipeline which is powered by the site.

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Up to 200 people gathered outside gate number four before noon.

The workers held A4-sized placards with the slogan Scotland's Workers Deserve Better and held aloft red and white flags.

Staff are striking over plans to end a final salary pension scheme for newcomers and other pension changes.

Earlier talks aimed at averting the industrial action failed to resolve the row.

The Unite union has agreed to provide 100 per cent safety cover at the site during the dispute.

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Unite's Mark Lyons told the rally: "We regret deeply the inconvenience to the good people of Scotland, but we've been forced to make a stand.

"Now Jim Ratcliffe's Ineos says to us we must surrender our pensions. We say no way, not now, not ever."

There were no plans for conciliation talks between Unite and Ineos management today, despite government calls for those involved to continue negotiations.

Scotland's First Minister Alex Salmond said: "I'm urging again both Ineos and Unite to get back together, to go through the Acas procedure, to sit down and resolve their differences and find an honourable settlement."

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But Tom Crotty, chief executive of Ineos, claimed the company had made "concession after concession" to the union in its negotiations.

He also warned that full production at the Grangemouth site could take up to a week to recommence.

The dispute led oil giant BP to turn off its Forties Pipeline, which delivers 30 per cent of the UK's daily oil output, overnight.

The pipeline brings in 700,000 barrels of oil a day from the North Sea to BP's Kinneil plant, which is powered from the Grangemouth site.

Industry representative Oil and Gas UK has called on ministers to intervene amid fears the industrial action may hit other offshore production.

Around 65,000 tonnes of fuel will be shipped in from Europe to keep Scotland moving through the dispute.

Unite maintained its stance on further industrial action today, saying that no future strikes were planned.

A spokeswoman said: "Further strikes are not planned at the moment.

"If Ineos doesn't come back to the table with a proposal that involves keeping the pension scheme open, then there will be the possibility of further strikes."

Millions of gas customers face price hikes of up to 20 per cent because of the Grangemouth disruption, experts warned last night.

The average annual bill could leap £200 to £1,200. About 70 oil and gas companies are linked to the Forties pipeline, although experts do not predict gas shortages.

The prospect of a prolonged dispute is already having a devastating effect on forward gas prices for next winter.

They have soared to a record 84.5p a therm according to Heren Energy, the European energy statistics provider. This time last year they were averaging just 43p a therm.

The threatened hike in bills comes as consumers are still reeling from the recent round of large gas and electricity price rises.