Ampol to bring Lytton back on line but remains cautious
Ampol will restart the Lytton refinery next month but has indicated it is nervous about the future.
Ampol says its Lytton refinery will undergo an upgrade.
The company, previously known as Caltex, shut down the Brisbane facility in May for extended maintenance as demand went through the floor.
The company said market conditions for refining were “highly uncertain” and its refining operations would remain under review.
The decision to reopen the facility was based on its assessment that refining would deliver better-integrated supply chain and earnings alternatives that imports.
“Ampol believes that the market conditions for refining continue to be highly uncertain and Ampol will continue to review its refining operations,” the company said in a statement to the ASX.
Analysts at RBC Capital Markets said fuel demand erosion in Australia peaked in April and was now growing back with Australian national fuel sales volumes posting recoveries over May and June.
“Australian retail fuel margins reached very strong levels in April 2020 of more than 35 cents a litre for gasoline and 13 cents a litre for diesel in April and May 2020.
“We think a strong focus on capital discipline with the build-out of the Ampol cost out program first announced in August 2019 will continue throughout 2020.”
