Australia’s top fuel retailer Ampol reported a 49% drop in first-quarter refining margins for its Lytton refinery in Queensland on Wednesday, citing weakness in refining profits in Singapore — a bellwether for Asia.
The company said its Lytton refinery margin decreased to $6.07 per barrel in the first quarter, down from $11.80 last year.
Meanwhile, the Lytton refinery’s quarterly output dropped 5.7% to 1.30 billion litres, as ten days of production were lost to prepare for Cyclone Alfred’s landfall.
Oil refiners have been facing a slump in profitability as slowing economic growth and rising penetration of electric vehicles in China. Additionally, new refineries coming online across Africa, the Middle East and Asia have put downward pressure on margins.
If the slump in refinery margins continues for the full second quarter, Ampol would be eligible for payment under Australia’s Fuel Security Services Payment program, “providing downside protection in a period of global refining market weakness”, the Sydney-based firm said.
In March, the fuel retailer flagged damage to a crude storage tank from heavy winds and rain as a result of the cyclone. Immediate costs arising from this damage also weighed on Ampol’s refinery margin, it said.
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