The Ampol Ltd (ASX: ALD) share price is in focus today as the company welcomes amendments to the Fuel Security Services Payment (FSSP), including raising the scheme’s support “collar” to 10.0 Acpl and deferring major refinery maintenance to boost domestic fuel supply.
What did Ampol report?
- FSSP collar increased from 6.4 to 10.0 Acpl; cap remains at 1.8 Acpl
- Favourable amendment to the Government Margin Marker calculation for Lytton refinery (+0.62 Acpl)
- Planned Turnaround & Inspection (T&I) at Lytton refinery deferred to August 2026
- Additional ~300 million litres of domestic fuel production enabled during deferral
- Scheme may provide up to $27 million support per quarter for Lytton’s operations at low margins
What else do investors need to know?
Ampol will engage in a second phase of the FSSP review in 2026, targeting longer-term fuel supply resilience and refining in Australia. Any material changes to the FSSP will depend on the outcome of this second-phase review.
The global oil market has been impacted by Middle East events and a reduction in Chinese fuel exports. Despite some disruptions in Asia, Ampol had strong inventory and confirmed orders at the outset of the conflict, helping ensure ongoing supply for its customers in Australia and New Zealand.
Ampol’s proactive deferral of its T&I maintenance at Lytton will help meet increased local demand, while a temporary easing of fuel standards by the government allows even more locally produced petrol to be sold domestically.
What did Ampol management say?
Matt Halliday, Managing Director and CEO, said:
We welcome the adjustments made to the FSSP, which effectively increase the level at which payments under the scheme will commence. The important role Australian refineries play in supporting the resilience of our domestic fuel supply is being reinforced in the current global oil market environment. The amendments recognise the significant cost increases, and capital investment made, since the scheme began in 2021 and the importance of maintaining an economically viable domestic oil refining capability in Australia for the medium term by providing support when refiner margins do not cover the cost of production.
The amendment of the collar to 10 Acpl and the favourable adjustment to the Government’s refiner margin calculation, will also assist in reducing the volatility in Lytton earnings over time. We look forward to continuing the dialogue with the Federal Government in the months ahead on the long-term prospects for transport fuels refining in Australia.
What’s next for Ampol?
Ampol will continue working with the Federal Government on the FSSP’s phase two review during 2026, which is expected to shape Australia’s future fuel resilience and refining sector.
In the short term, Ampol remains focused on maintaining reliable supply for customers, taking advantage of regulatory changes and operational flexibility to help meet domestic needs amid current global supply challenges.
Ampol share price snapshot
Over the past 12 months, Ampol shares have risen 35%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.
The post Ampol welcomes stronger refinery support and domestic supply boost appeared first on The Motley Fool Australia.
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