Viva's Q1 refining margin doubles on year; outlook remains challenging

London (Quantum Commodity Intelligence) – Australian refiner and fuels and lubricants marketer Viva Energy announced Tuesday that its Q1 refining margin more than doubled on the year at $5.9/bbl, but said the market remains challenging and they expect to receive AU$19.6 million ($15.2 million) from the government Fuel Security Package for the quarter.

The refining margin was consistent with those achieved at the end of last year after its Geelong refinery returned to full production but remained well below long term averages, said the company in a statement.

Margins at the refinery declined to an average of US$7.4/bbl in 2018 against an average of
US$10.2/bbl in 2017.

Margins fell further in the first half of 2019 before bouncing back close to $9/bbl at the end of the year.

Sales growth in the company's agriculture, resources and transport sectors each contributed to relatively strong gasoline and diesel sales in the first quarter compared with Q1 last year.

Sales of jet fuel to the aviation sector were down 62% compared with the same period last year, volumes grew 15% over Q4 2019 as domestic air travel recovers.

Total group retail sales were, however, still down 17% on the year with demand from the marine industry also hit by a  temporary cessation of cruise activity in Australia.