Ampol Raises Fuel Security Payment Collar to 10 Acpl, Defers Refinery Maintenance

Amendments to Fuel Security Payment Scheme

Ampol Limited (ASX:ALD) has announced significant updates to the Fuel Security Services Payment (FSSP) scheme that underpin the economic viability of its Lytton refinery in Queensland. The key change is an increase in the payment collar from 6.4 Australian cents per litre (Acpl) to 10.0 Acpl, while the capped payment remains unchanged at 1.8 Acpl. This adjustment reflects the rising costs and capital investments made since the scheme’s inception in 2021, aiming to provide stronger support when refining margins are tight.

The revised scheme introduces a variable support payment for refining margins between 8.2 Acpl and 10.0 Acpl, with no payments made if margins exceed 10.0 Acpl. Ampol estimates this could translate to up to $27 million per quarter or $108 million annually in support during periods of low refining margins, based on production volumes at Lytton.

Operational Adjustments Amid Global Supply Challenges

In response to ongoing geopolitical tensions in the Middle East and their ripple effects on global oil markets, Ampol has deferred its scheduled refinery Turnaround and Inspection (T&I) maintenance from early June to August 2026. This strategic delay is expected to enable the Lytton refinery to produce an additional 300 million litres of petrol, diesel, and jet fuel domestically during a period when supply chains are under pressure.

The company highlights that the Lytton refinery processes 'light sweet' crude oil, which remains available despite disruptions affecting 'sour' crude supplies from the Middle East. Additionally, the Federal Government’s temporary amendment to the gasoline fuel standard will allow the refinery to sell 80 to 100 million extra litres of petrol per month domestically, further bolstering local fuel availability.

Looking Ahead: Phase 2 Review and Long-Term Resilience

Ampol is preparing to engage with the Federal Government on a second phase review of the FSSP, expected to conclude later this year. This review aims to clarify Australia’s long-term ambitions for fuel supply resilience, including the future role of domestic refining. CEO Matt Halliday emphasised the importance of maintaining economically viable refining operations in Australia to support national fuel security amid a volatile global environment.

While the amendments to the FSSP and operational decisions provide immediate relief and support, the ultimate shape of Australia’s refining landscape will depend on outcomes from the Phase 2 review and evolving market conditions.