Low oil prices were good news for Caltex’s refining business in March when margins more than tripled.

The refining business’s importance to Caltex in relation to distributing and retailing was significantly reduced with the closure of its Sydney refinery in 2014.

However the Brisbane refinery in Lytton is enjoying a renaissance, thanks to the plunge in crude oil prices from $US115 a barrel last June to $US50 in January and its own operational performance improving.

Caltex’s refiner margins – the difference between the cost of importing crude oil to make fuel products itself and the cost of importing its fuel products from Asia – jumped from a $5.31 a barrel in February to $20.66 in March.

It was also nearly double the $10.50 a barrel realised last March.

A lower oil price does not necessarily translate to lower prices for fuel, which can depend on separate market demand and supply forces.

The strong performance is timely with speculation that Lytton could be closed when Kurnell was being shut down.

It employs about 600 workers that produce petrol, diesel and jet fuel.

Caltex shares had climbed 35.5 cents, or one per cent, to $35.855 at 1305 AEST.

Extracted in full from SBS.

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