Australian govt launches financial package to save domestic refining

London (Quantum Commodity Intelligence) – Australia's last two operational refineries are to receive government support in a bid to keep the plants in business for at least the next six years, according to a government statement Monday. 

As part of the deal, Ampol's Lytton refinery and Viva's Geelong plant will remain operational until at least mid-2027, in a move to guarantee energy security.

Lytton has a refining capacity of around 105,000 barrels per day and Geelong around 130,000 b/d.

BP and Exxon have already announced the closures in 2021 of Australian refineries as the industry faces increasing competition from newer more efficient plants, particularly in China and India.

In the early 2000s, Australia still had eight major refining plants, although some have since converted to oil import terminals.

Refining margins have been in the doldrums during the COVID-19 pandemic, with key transport fuels gasoline, diesel and jet fuel particularly hard hit.

In a statement, Viva said it welcomed the support scheme, known as the Fuel Security Package (FSP).

"The FSP acknowledges the importance of refining to the country's broader energy security and enhances the long-term viability of the domestic refining sector," said Viva, noting that the package remains subject to legislative approval processes.