Ampol’s oil refinery sinks to loss as virus drains fuel demand


“We have taken early and decisive action to mitigate these impacts.”

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Along with falling fuel sales, the pain of COVID-19 has been most acutely felt across the nation’s four oil refineries, which have been forced to make production cutbacks and announce prolonged maintenance shutdowns.

The future of the Geelong oil refinery, which has recorded a $50 million half-year loss, is being reviewed by owner Viva Energy.

Ampol’s 109,000-barrels-a-day Lytton refinery in Brisbane has been closed for maintenance since May after the company forward works in response to crashing demand and profit margins. Ampol plans to restart the plant in September, despite the weaker margins.

Analysts on Monday said Ampol’s result was slightly below their expectations amid pressure on the Lytton refinery’s margins and softer retail fuel volumes.

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RBC Capital Markets analyst Gordon Ramsay said Australia’s fuel demand erosion peaked in April and was beginning to return, with national fuel sales volumes posting recoveries in recent months.

“We expect strong retail fuel margins to continue offsetting volume weakness as states domestically contend with varying degrees of restrictions,” he said.

Ampol on Tuesday declared an interim dividend of 25¢ per share, lower than analysts had been expecting.

Earlier this month, Mr Halliday and his team unveiled the first rebadged Ampol petrol station sites in Sydney, the first of more than 1900 locations to be overhauled in the coming two years.

The company first flagged its plan to re-brand as Ampol last year after US giant Chevron terminated its licensing agreement and removed the Australian company’s right to use the Caltex name. Ampol was a historic Australian fuel business, founded in 1936 and originally known as the Australian Motorists Petrol Company. It was acquired by concrete seller Pioneer in 1988 before merging in 1995 with Caltex Australia, which retains the rights to the name.

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