First Fuel Security Payment finalised to lock in local refineries
The Morrison Government is delivering on its commitment to boost Australia’s fuel security and has secured the ongoing operations of the Ampol Lytton Refinery in Queensland and the Viva Energy Geelong Refinery in Victoria.
The first quarter of the Fuel Security Services Payment has been finalised by the Government, with payments well below the maximum support available.
For quarter one of 2021-22, the Department of Industry, Science, Energy and Resources has determined Viva Energy will receive $12.45 million. Ampol will not receive any payment as their payment rate is 0 cents per litre.
These payments have secured the ongoing operations of the Ampol Lytton Refinery in Queensland until at least 30 June 2027. The Viva Energy Geelong Refinery in Victoria has extended this commitment until 30 June 2028 – one year more than the minimum period required under the Fuel Security Act 2021. There is an option for both refineries to extend these commitments to mid-2030.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said the Government’s landmark fuel security package delivers value to the taxpayer, while enhancing Australia’s domestic fuel security.
“Our comprehensive fuel security package will ensure we are prepared for any emergency, see an increase in our onshore diesel stockholdings and lock in jobs of our fuel dependent industries, such as our truckies, farmers, miners and tradies,” Minister Taylor said.
“The results demonstrate the Fuel Security Services Payment is working as intended, with refiners only receiving support from the Government when refinery market conditions are poor.
“In the case of Ampol, their margins have rallied to such an extent they do not need any support. Viva’s margins are also improving, with the payment well below the maximum available.
“This means the Morrison Government has been able to secure our local refineries while providing value for taxpayers with lower than budgeted payments.”
The Government’s fuel security measures protect around 1,250 local jobs across the two refineries and will create up to 1,750 construction jobs as part of the $250 million in support to upgrade the refineries to produce better quality fuels.
Refiners are paid a variable Fuel Security Services Payment based on the volume of key transport fuels produced in each quarter from July 2021.
The rate of payment is tied to external market conditions and other operating factors. The rate ranges between 0 and 1.8 cents per litre, limiting the downside risk only.
Payments to refiners will be published on the Department’s website each quarter.
Minister Taylor's office 02 6277 7120