Australia’s local refineries will receive support from the Morrison Government for major infrastructure upgrades to strengthen local production and supply better-quality fuels.
Through the Refinery Upgrades Program, the Morrison Government is providing $250 million to Australia’s domestic refiners, the Ampol refinery in Lytton, Brisbane and the Viva Energy refinery in Geelong, Victoria.
These two $125 million grants will be matched by both refineries and will allow them to begin major construction works to upgrade their facilities. This will bring more than $500 million of public and private sector investment into these local communities.
Prime Minister Scott Morrison said the Government’s investments would secure fuel production and supply for Australia in the face of global uncertainty.
“COVID-19, the Russian war in Ukraine and trade restrictions have disrupted global supply chains and Australia is not immune,” the Prime Minister said.
“Oil refineries literally fuel a stronger economy and these investments will help keep our truckies, miners, defence force and farmers moving across Australia.
“Our plan for a stronger future locks in Australia’s refining capabilities and will ensure upgrades are made to improve the quality of our fuel.
“These investments also protect the 1,250 existing refinery jobs and support the creation of around 500 more construction jobs across Lytton in Brisbane and Geelong.
“Cutting the fuel tax and this fuel security package put Australian motorists and businesses first. Our support for local refineries ensures we have the local capabilities to produce fuel even in the most challenging of times to keep our economy running.”
This funding is part of the Government’s comprehensive fuel security package announced in the 2021-22 Budget, which has locked in both the refineries operations into the future.
Strong supply chains underpin Australia’s economic security and Australia’s living standards.
The Government is focused on securing essential supply chains with our $2.5 billion Modern Manufacturing Initiative, including key investments through our Supply Chain Resilience Initiative.
Last year we secured production of Adblue at Gibson Island in Brisbane – an essential input to keep trucking fleets operating. This followed China’s sudden decision to suspend urea exports, from which we make AdBlue.
The grants will enable the local production of ultra-low sulfur petrol products in Australia and allow the Government to bring forward the introduction of a new standard from 2027 to 2024.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said the grants would not only support our local refining capability and safeguard fuel security, but also provide health benefits for Australians.
“Bringing forward the roll-out of ultra-low sulfur fuel from 2027 to 2024 will deliver significant health benefits for Australians through improved air quality. This is estimated to result in $1.02 billion in avoided health costs,” Minister Taylor said.
“These grants are the next step in the Morrison Government delivering on our commitment to support Australian domestic refiners to keep producing local fuel for Australian motorists.
“As well as enabling the production of better quality fuels, our landmark refinery production payments continue to provide taxpayers with lower than budgeted payments, with both refineries not needing any support in the second quarter.
“We will continue to ensure Australian families and local industry can access the quality fuel they need, when they need it through our fuel security package.”
The Department of Industry, Science, Energy and Resources has further confirmed that Ampol and Viva Energy will not need to receive any payment for the second period of the Fuel Security Services Payment because the refineries were doing well. This follows on from quarter one, where only Viva Energy received payment, totalling $12.45 million.
The Refinery Upgrade Program is a key part of the Government’s comprehensive fuel security package, announced in the 2020-21 Budget, to secure Australia’s long-term fuel supply by ensuring our sovereign refining capability meets our needs during an emergency and into the future.
These grants will cover up to 50 per cent of total eligible project expenditure up to the maximum grant of $125 million. Projects are expected to be completed before the end of 2024.
This is in addition to the Morrison Government’s action to halve the fuel excise for six months to ease pressures at the petrol pump and cost of living concerns for Australian motorists.