Ampol Limited has unveiled its 2025 strategic roadmap focusing on refinery upgrades, retail expansion, and energy transition initiatives, aiming to boost margins and operational efficiency.
- Completion of Ultra Low Sulfur Fuels project by end-2025
- $50 million targeted cost reductions through productivity programs
- Expansion of convenience retail and U-GO unmanned fuel sites
- Growth in EV charging infrastructure across Australia and New Zealand
- Ongoing government engagement on Fuel Security Services Payment
Strategic Priorities for 2025
Ampol Limited presented a comprehensive update at the Macquarie Australia Conference outlining its key priorities for 2025. Central to its strategy is the completion of the Ultra Low Sulfur Fuels (ULSF) project at the Lytton refinery, expected to start up by the end of the year. This upgrade aims to produce gasoline with a 10ppm sulfur content, historically commanding a premium price in the Australian market, potentially enhancing Ampol's refining margins.
Alongside this, Ampol is committed to improving refinery reliability and operational productivity, targeting an initial $50 million in nominal cost reductions. These savings will be driven by enhanced asset integrity, supply chain efficiency, and technology investments, including digital and data spend optimization.
Retail Expansion and Innovation
The company is aggressively expanding its convenience retail footprint in Australia and New Zealand. In Australia, Ampol is progressing the development of highway sites such as those on the NSW M4 at Eastern Creek, integrating quick service restaurants and piloting premium store formats with refreshed designs and elevated customer experiences. Product innovation trials, including rejuvenated food service offerings, are also underway.
In New Zealand, Ampol plans approximately 25 retail site refreshes in 2025, continuing its segmented retail strategy and launching a new digital loyalty program under the Z brand. The rollout of the U-GO unmanned fuel offer is a highlight, with 28 sites converted in Australia and plans to reach over 60 sites by the end of 2026. This initiative is expected to deliver a $30 million EBITDA uplift group-wide by 2026, driven by increased fuel volumes and operational efficiencies.
Advancing the Energy Transition
Ampol is also evolving its energy offerings to align with the transport sector’s transition. The company is expanding its electric vehicle (EV) public charging networks across Australia and New Zealand, aiming to serve the growing EV customer base. In partnership with IFM and GrainCorp, Ampol is progressing pre-FEED and feasibility studies to establish an integrated renewable fuels industry in Australia, focusing on sustainable aviation fuel and renewable diesel derived from non-petroleum feedstocks.
Market Context and Outlook
Global refining markets remain volatile, influenced by geopolitical tensions, tariff adjustments, and supply-demand dynamics. Ampol noted recent improvements in product cracks and refinery margins, partly due to easing US tariffs and tighter inventories amid major refinery maintenance globally. The company is actively engaging with the Australian government to review the Fuel Security Services Payment mechanism, aiming to mitigate downside risks associated with fuel security obligations.
Looking ahead, Ampol plans to maintain disciplined capital allocation, targeting a return to its leverage range during 2025 and continuing its track record of returning surplus capital to shareholders. The company’s integrated fuel supply chain and retail network position it well to navigate the evolving energy landscape while delivering growth and shareholder value.
Bottom Line?
Ampol’s 2025 strategy balances operational upgrades, retail innovation, and energy transition, setting the stage for sustainable growth amid market uncertainties.
Questions in the middle?
- How will the Ultra Low Sulfur Fuels project impact Ampol’s refining margins in volatile markets?
- What are the risks and scalability challenges associated with the U-GO unmanned fuel rollout?
- How soon could renewable fuels contribute meaningfully to Ampol’s energy mix and earnings?