Ampol says it is playing a key role in the Albanese government’s $10 billion fuel security package, underlining the energy group’s importance as one of only two refinery operators in Australia amid the global fuel turmoil caused by conflict in the Middle East.
The ASX-listed company operates the Lytton refinery in Brisbane, which, with Viva Energy’s Geelong plant, produces about one-fifth of Australia’s fuel supplies.
In response to the fuel crisis triggered by the United States’ and Israel’s strikes on Iran, the government launched a $10 billion funding package to boost Australia’s reserves of diesel and jet fuel to 50 days of average use.
The 1 billion-litre government-owned stockpile – aimed at shoring up fuel supplies and preventing future supply chain shocks – departs from the previous security policy, which relied on privately owned storage facilities.
Speaking at the energy group’s annual meeting in Sydney, chairman Steve Gregg told shareholders that Ampol was “at the forefront of discussions with government”.
“[Managing director] Matt Halliday and his team have been talking with minister [Chris] Bowen just about every day about not just getting fuel into the country safely and providing it to the country, but also on minimum storage obligations and fuel security,” Gregg said.
“The $10 billion that they’ve set aside is an interesting number, and I think the detail is yet to be worked through. We are involved directly.
“It’s quite a way to go before we understand [the plan] fully, and the government comes up with a hard view on how that will work. But I think there is a general view that we need more storage, and we will be participating in that.”
The importance of Lytton to Australia’s fuel supplies was amplified when Viva Energy’s Geelong refinery was hit by a fire last month that reduced its output.
The Lytton refinery processes a different grade of crude oil – light sweet – to the sour crude sourced from the Persian Gulf, and has therefore been relatively unaffected by the turmoil caused by the Iran conflict.
Ampol, which also runs one of the country’s largest networks of petrol stations, has seen its refining margins spike following the conflict in the Middle East.
The Lytton refinery margin for the first quarter of 2026 was US$25.45 per barrel, compared with US$6.07 per barrel in the same period a year ago. Refining production was up 10 per cent year-on-year to 1.4 billion litres in the quarter.
Gregg dismissed the prospect of a third fuel refiner being built in Australia soon, given the high cost and the long timeline before new capacity could come online.
“I’d be very surprised if there’s a new refinery built in the country. It would take three or four years of feasibility studies, and I’d hate to think how many billion dollars to build,” he said. “Hopefully, Viva comes back online fully, down in Geelong. Both have their place.”
Ampol shares, which are one-quarter higher over the past year, were down 0.7 per cent on Thursday at $33.79, giving it a market value of $8 billion.
Extracted in full from: https://www.afr.com/companies/energy/ampol-sees-big-opportunity-in-labor-s-10b-fuel-reserve-plan-20260513-p5zw8c
