But Ampol’s announcement was downbeat and warned that economic conditions were uncertain because the pandemic was “further depressing an already soft regional refining margins”.

Refineries have been given the option of a 1 cent a litre subsidy from the Federal Government in an attempt to keep them afloat during the pandemic which has slashed their profits because of the impact on the transport sector, particularly airlines.

However, the subsidy only came into effect on January 1, which was outside Ampol’s reporting period and Ampol has so far not committed to accepting it because of the conditions imposed by the Government.

Ampol said its fourth-quarter result was a $4 million loss.

“While the result is above consensus, economic conditions in 2021 remain uncertain as a result of continued COVID-19 impacts on international and domestic demand, further depressing already soft margins and the strengthening Australian dollar over recent months also worked against the Lytton refiner margin when expressed in Australian dollars,” Ampol said in a statement.

The company is considering all options for the refinery but has to consider the impact on its continuing supply chain in Australia if it were to close Lytton.

It is expected the review will be completed by mid-year and one option would mean the Lytton site became a fuel import terminal.

Ampol also said the $145 million loss did not include any potential significant items that would arise in the finalisation of financial disclosures, including possible writedowns.

The Federal Government’s support package, which includes the 1 cent a litre subsidy, comes with conditions. Refineries that accept the subsidy must agree to continue to operate and must have long-term self-help measures and some analysts believe that it will have to be increased later this year.

All four Australian refineries have posted big losses.

RBC Capital said it saw the fourth quarter result as promising.

“A Q4 2020 loss of $4m was $40m ahead of our forecast and $20m ahead of consensus estimates, driven primarily by stronger than anticipated margins and marginally higher volumes.

It said margins were underpinned by very low landed costs of crude in the quarter.

“Ampol headwinds over 2021 include a higher Australian-US exchange rate, which adversely impacts the Ampol optimisation program and the fact jet fuel demand remains low (jet volumes were down 70 per cent in July 2020 vs prior corresponding eriod),” RBC said.

“Normally jet is up to around 15 per cent of Ampol’s refining output, but around 75 per cent of jet fuel sales are underpinned by international flight sales and this remains severely restricted from global COVID-related lockdowns.”