Australia will pay up to US$1.8bn to its last two refineries to stay open

The Australian government has agreed to pay up to AUD2.3bn (US$1.8bn) until 2030 to Ampol and Viva Energy Group (Vitol) to keep their refineries operational until at least 2027 and to ensure long-term fuel security in Australia. Viva Energy Group owns the 118,000 bbl/d Geelong refinery in Victoria, which accounts for 50% of Victoria's fuel supply and 10% of Australia's, while Ampol (former Caltex) owns the 108,600 bbl/d Lytton refinery in Brisbane. The two companies will each receive up to AUD125m (US$97m) to upgrade their refineries to produce ultra-low sulphur petrol by the end of 2024. The refineries will also receive financial support when refining margins fall below an agreed level (AUD1.8c/l, i.e. around US$2.2/bbl).

There are four refiners in Australia, namely BP (Kwinana refinery, 146 kb/d), Viva Energy group (Geelong refinery; 128 kb/d), Ampol (Lytton refinery; 109 kb/d), and ExxonMobil (Altona refinery; 90 kb/d). All recently announced plans to stop refining operations due to the strong competition from Asia's mega refineries and current global refining overcapacity, prompting the government to act to preserve its refining sector. In September 2020, Australian oil company Viva Energy announced that it could close its 128,000 bbl/d Geelong refinery in Victoria, due to the fall in petroleum products demand. In October 2020, Ampol (formerly Caltex) stated that it was considering closing its 109,000 bbl/d Lytton refinery due to the depressed market. In November 2020, BP decided to stop its 146,000 bbl/d Kwinana refinery. In February 2021, ExxonMobil decided to close its 90,000 bbl/d Altona refinery in Victoria.