Ampol Strengthens Supply Resilience Amid Global Disruptions

About Ampol Limited

Ampol Limited (ASX: ALD) is one of Australia’s leading transport energy providers, supplying fuels and energy solutions across Australia, New Zealand and international markets. The company operates an integrated supply chain, including refining, importing, distribution and retail networks.

Ampol’s key asset is the Lytton refinery in Queensland, one of only two remaining refineries in Australia, which plays a critical role in domestic fuel security. The company also leverages a global trading and shipping capability headquartered in Singapore, enabling access to international fuel markets and diversified supply sources.

Ampol’s strategy focuses on maintaining fuel supply resilience, optimising refining operations and adapting to evolving energy market dynamics, including energy transition considerations.

Operational Update and Policy Support

Ampol has welcomed recent amendments to the Federal Government’s Fuel Security Services Payment (FSSP), which is designed to support domestic refining capacity during periods of weak refining margins.

The revised framework increases the payment threshold and improves the margin calculation mechanism for the Lytton refinery, providing enhanced earnings stability and reducing volatility over time.

Management noted that the changes recognise rising operating and capital costs since the scheme’s introduction and reinforce the strategic importance of maintaining domestic refining capability in Australia.

The updated scheme provides variable financial support when refining margins fall below defined thresholds, with payments linked to production volumes, strengthening the economic viability of refining operations.

Lytton Refinery and Supply Chain Strategy

A key operational decision announced by Ampol is the deferral of its scheduled Turnaround and Inspection (T&I) maintenance program at the Lytton refinery from early June to August 2026.

This adjustment is expected to increase domestic fuel production by approximately 300 million litres during the deferral period, helping to support national fuel supply amid global disruptions.

The company emphasised that maintaining continuous refinery output during this period is strategically important, particularly given heightened uncertainty in global energy markets.

Ampol continues to balance refinery utilisation with long-term maintenance requirements, ensuring both short-term supply stability and long-term asset reliability.

Global Market Disruptions and Supply Dynamics

The ongoing conflict in the Middle East has significantly impacted global oil markets, particularly within the Asian refining system, which is a key source of imported fuels for Australia.

Approximately 80% of Australia’s fuel demand is met through imports, with domestic refineries accounting for the remaining portion. Ampol supplies around 40% of its domestic customer demand via the Lytton refinery, with the balance sourced through international markets.

Supply conditions have been further tightened by reduced Chinese exports of refined fuels and increased regional demand, contributing to volatility in availability and pricing.

Ampol indicated that while disruptions to finished fuel imports have occurred, the company is actively securing alternative supply sources and working closely with global suppliers to maintain continuity.

Inventory Position and Operational Readiness

Ampol entered the current period of geopolitical disruption in a relatively strong position, supported by adequate crude and refined product inventories as well as confirmed supply orders.

This preparedness has enabled the company to manage near-term supply risks more effectively compared to less diversified operators.

In addition, the Lytton refinery processes “light sweet” crude, which is sourced differently from Middle Eastern crude, providing further insulation from supply disruptions affecting heavier crude grades.

The company also noted that international initiatives, including strategic reserve releases coordinated by global energy agencies, are expected to support supply stability in the near term.

Strategic Importance of Domestic Refining

Ampol’s update reinforces the critical role of domestic refining infrastructure in Australia’s energy security framework.

The combination of government policy support and operational flexibility at Lytton positions the company to contribute meaningfully to national fuel resilience, particularly during periods of global supply disruption.

Management highlighted that maintaining a viable refining sector is essential for reducing reliance on imports and mitigating exposure to international supply shocks.

Medium-Term Outlook

Looking ahead, Ampol expects to continue engaging with the Federal Government on the second phase of the FSSP review, which will focus on long-term fuel security and refining policy settings.

This review is expected to provide greater clarity on Australia’s future approach to domestic refining and energy resilience.

In the near term, market conditions are likely to remain influenced by geopolitical tensions, supply chain disruptions and volatility in refining margins.

However, Ampol’s integrated supply chain, diversified sourcing capability and strategic refinery operations provide a solid foundation to navigate these challenges.

Outlook

While global energy markets remain volatile, Ampol appears well positioned to manage near-term disruptions while maintaining focus on long-term operational stability.

The combination of supportive policy settings, strong inventory management and flexible supply sourcing underpins the company’s resilience in a challenging environment.

The Lytton refinery remains central to this strategy, both as a contributor to domestic fuel supply and as a key asset in Australia’s broader energy security framework.

As geopolitical risks persist, Ampol’s ability to balance domestic production with global supply access will remain a critical determinant of performance and strategic positioning.