Gasoline prices are pushing up margins at the Ampol oil refinery

Fuel giant Ampol’s Brisbane oil refinery has benefited from a 4.5 percent year-on-year increase in its profit margin, which could rise further from next month as European nations impose fresh bans on Russian oil products.

Ampol, the nation’s largest supplier of gasoline, diesel and jet fuel, told investors Wednesday that margins from processing crude oil into fuels at its Lytton refinery were $11.75 ($16.79) per barrels remained above historical averages versus $11. 24 a year ago.

Ampol's Lytton oil refinery in Brisbane.

Ampol’s Lytton oil refinery in Brisbane.Credit:Bloomberg

However, the result marked a decline from $15.46 a barrel in the September quarter.

Gordon Ramsay, an analyst at the Royal Bank of Canada, said Ampol’s December-quarter margin was 19 percent below its forecast, largely because Ampol bought crude oil up to three months ahead of consumption and faces a “time lag” in price changes.

“We expect Ampol to continue to deliver above historical average refining margins at Lytton through 2023, partially offset by freight costs and quality premiums,” he said.


“Looking forward, we see the proposed EU sanctions on Russian product imports on February 5 as a key linchpin with an upside risk to refinery margins, particularly diesel.”

As Western nations impose economic sanctions on Moscow and shun Russia’s vast energy sector, oil and fuel prices have skyrocketed. The reference price for Brent oil, which broke through $100 a barrel last year, has since declined as investors worry about a global economic slowdown and rising coronavirus cases in China.

Ampol, like fuel distributors everywhere, was hit hard in 2020 by the COVID-19 restrictions that kept people indoors, cars in driveways and planes grounded. Gasoline prices are pushing up margins at the Ampol oil refinery

Brian Lowry

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