Ampol (ASX:ALD) has has deferred a scheduled major maintenance program at the Lytton refinery from early June to the start of August CY26, to enable increased domestic oil production. The maintenance program would have impacted ~300 million litres of petrol, diesel and jet production during the proposed period.
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The company also said it has welcomed today’s announcement of a phase one review of the Fuel Security Services Payment (FSSP) system.
MD and CEO, Matt Halliday, said Ampol anticipates engaging with the federal government on a second phase review to clarify Australia’s ambitions with regard to long-term fuel supply resilience, including domestic refining, in the months ahead. This review is expected to be completed during CY26.
“We welcome the adjustments made to the FSSP, which effectively increase the level at which payments under the scheme will commence. The important role Australian refineries play in supporting the resilience of our domestic fuel supply is being reinforced in the current global oil market environment,” he said.
“The amendments recognise the significant cost increases and capital investment made, since the scheme began in 2021 and the importance of maintaining an economically viable domestic oil refining capability in Australia for the medium term by providing support when refiner margins do not cover the cost of production.
“The amendment of the collar to 10 Australian cents per litre (Acpl) and the favourable adjustment to the government’s refiner margin calculation will also assist in reducing the volatility in Lytton earnings over time.
“We look forward to continuing the dialogue with the Federal Government in the months ahead on the long-term prospects for transport fuels refining in Australia.”
These fresh amendments include an increase in the collar from 6.4 to 10.0 Australian cents per litre (Acpl) and a favourable adjustment to the federal government margin marker calculation for the Lytton refinery.
Lytton remains as one of only two domestic refineries that address approximately 20% of Australia’s demand. The balance of the Australian market (80%) is supplied via imports, largely from Asia.
Mr Halliday said Ampol was well prepared at the commencement of the Middle East conflict in terms of crude and product inventory and confirmed orders.
He added the situation in the Middle East is having a particular impact on the Asian refining system, which largely relies on the type of crude oil supplied from the Middle East and is an important source for imports of refined fuel products (such as petrol, diesel and jet fuel) into Australia and New Zealand.
The situation has been exacerbated by the cancellation of Chinese exports of refined fuels into the Asian region (representing approximately 15% of Asia ex-China demand), as well as a temporary acceleration in demand in Australia and New Zealand in some areas.
ALD is up 0.30% to $33.07. Mkt cap $7.856B.
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