The Tax Payer to prop up refinery profits
VEA +7.04% / ALD +6.09%: the fuel businesses received a boost from the taxpayer today with the Government announcing a $2b support package for domestic refineries. Australia is down to its last two local refineries – Viva Energy’s Geelong operation and Ampol’s Lytton refinery in Brisbane. The support package has an initial period through to 2027 with an additional 3 year option, but comes with a number of caveats including minimum holding requirements, upgrades as well as increased capacity to produce ultra-low sulphur gasoline. Still though, the support will prop up earnings if margins were to continue to slide and at the very least delays an expensive restructure for the two businesses.
