Ampol chief executive Matt Halliday says the cut-price, no-staff U-GO pilot program is delivering for the petrol and diesel supplier as customers shift only gradually towards electric vehicles.
Previously underperforming petrol station sites that have been converted to U-GO have enjoyed an increase in fuel volumes of more than 50 per cent after six months, Halliday said. That means earnings per U-GO site – there are now 46 – have increased by about $350,000 a year and the investment to convert stations to the new model is paid back in about 12 months.
“We’re really excited about U-GO – it’s delivering a strong value proposition for customers,” Halliday said after Ampol posted an 83 per cent jump in replacement cost net profit before one-off items.
“We’re really encouraged by what we see, and they play a really important role when we look to the integration of EG and the application of our strategy to that network,” he added, referring to the company’s proposed $1.1 billion acquisition of EG Australia, the chain of stations that were once run by Woolworths, which is being assessed by the competition regulator.
The U-GO pilot program comes despite a broader shift to premium fuels across Ampol’s portfolio, and as demand for liquid transportation fuels – including petrol, diesel and jet fuel – reached a record in Australia last year despite the loss of part of the market to electric cars. The proposed EG acquisition, which would add about 500 service stations, also reflects expectations for ongoing strong demand for traditional fossil fuels.
Halliday said while consumer uptake of electric vehicles was “consistent” thanks to incentives and supportive policies, “we haven’t seen a real step change up at this stage”. “From an EV point of view, the grid and grid infrastructure and the availability of charging are just going to become a more and more important issue that we’ll see play out,” he said.
Ampol has been working on what low-carbon products it will distribute, and Halliday said that heavier fuels like diesel and jet fuel were difficult. “The economics are far more challenging, and policy is going to play a really important role if those industries are able to emerge,” he added.
Ampol’s net income dropped 33 per cent to $82.4 million for the 12 months ending December 31. But the market was focused on so-called replacement cost numbers that ignore the impact of oil prices on stockpiles. On that basis, profits rose to $429.2 million, from $234.8 million a year earlier, with better earnings at service stations and in Ampol’s infrastructure business. The Lytton refinery in Brisbane also returned to profitability.
Ampol, the former Caltex Australia, declared a final dividend of 60¢ a share, up from 5¢ at the same time last year. Shares were down 3.1 per cent at $28.09 just before midday in a broader weaker market and, as Barrenjoey analyst Dale Koenders pointed to a “weak” start to 2026 for refiner margins.
Ampol reported a refining margin of $US8.13 a barrel for January, which, while higher than in January last year, compared with the market’s expectations for the first half of about $US11 a barrel, Koenders said.
Still, the company said it had started the year “strongly” in convenience retailing and in fuels and infrastructure.
Halliday said Ampol was still in discussions with the federal government on a revision to the domestic subsidy for refining, called the Fuel Security Services Payment, with a resolution expected this quarter. The focus is on adjustments to take into account increased operating costs at the plant.
“During a quarter when margins are low we need the support to kick in – that hasn’t consistently been the case and the main reason that hasn’t been the case is because costs have escalated significantly.”
Extracted in full from: https://www.afr.com/companies/energy/discount-u-go-delivers-for-ampol-as-motorists-drag-heels-on-evs-20260220-p5o3zt
