About 150 million litres of refined fuels used for cars and planes will be withheld from the market over Christmas because of a maintenance issue at Ampol’s Lytton refinery in Queensland.
The oil refiner has delayed the restart of a key processing unit at Lytton until mid-November.
Lytton refinery
Ampol said inspections during a planned maintenance shutdown had identified additional reactor refractory relining work at its fluidised catalytic cracking unit, prompting management to bring forward maintenance on one of the refinery’s crude units.
The decision comes as geopolitical tensions in the Middle East and constraints on fuel supplies put renewed focus on Australia’s ability to maintain reliable supplies of refined products, although Ampol said customer supply was not expected to be affected.
Ampol said completing the additional work during the existing turnaround would be the most economically efficient approach, allowing it to use labour already mobilised and support reliable production and fuel availability through 2027.
The extended shutdown comes as elevated regional refining margins support Ampol’s integrated supply chain, with the company reporting growth in underlying operating earnings compared with the average quarterly result in the second half of last year.
Fuel production
Ampol’s Lytton refiner margin averaged $US23.92 a barrel in the September quarter, more than double the $US10.64 recorded a year earlier. However, the result fell short of expectations from RBC Capital Markets, which had forecast a margin of $US34 a barrel, and Visible Alpha consensus of $US26.68.
Refinery production totalled 1.137 billion litres during the quarter, down 9.2 per cent from a year earlier and below RBC’s estimate of 1.35 billion litres.
RBC analyst Gordon Ramsay described market sentiment towards the trading update as negative, pointing to the weaker-than-expected refining margin and fuel sales volumes.
Ampol said group replacement cost operating profit before interest and tax grew compared with the average quarterly result in the second half of 2025, supported by favourable operating conditions and continued growth in convenience retail earnings.
Fuel sales
Total group fuel sales volumes rose 3.6 per cent to 6.245 billion litres in the September quarter compared with the same period a year earlier. Australian volumes fell 2.3 per cent to 3.551 billion litres, while international volumes increased 23 per cent to 1.841 billion litres.
Australian wholesale volumes declined 19 per cent to 2.081 billion litres during the quarter. Ampol said its core convenience retail network recorded double-digit growth in headline shop sales compared with the previous corresponding period, with shop gross margins and average basket values also improving.
The company’s convenience retail division also benefited from earnings contributed by the acquisition of EG Australia. Ampol said initial integration activities were progressing to plan and had reinforced management’s confidence in delivering previously announced synergies. Its first U-GO site conversion was completed in early October.
Ampol also pushed back commissioning of its ultra-low-sulphur fuels project to the first quarter of 2027, but said the timing change was not expected to have a material impact on earnings and its capital expenditure outlook remained unchanged.
Geopolitical tensions
The company said recent geopolitical tensions in the Middle East and ongoing constraints in fuel product supplies continued to favour its integrated supply chain, although the unusual trading conditions that supported the first half had not recurred.
Ampol said it remained well placed to maintain fuel supply to Australia and New Zealand.
The additional maintenance is expected to support refinery reliability and fuel availability through 2027, with the company saying the decision to complete the work during the current shutdown would avoid the cost of separately mobilising labour at a later date.
Extracted in full from: https://www.theaustralian.com.au/business/mining-energy/christmas-fuel-supply-cut-by-150-million-litres-as-ampol-extends-refinery-maintenance/news-story/d05f84b40f3b5d51b4656d0799566e83
