Ampol aims to grow its retail footprint with the acquisition of UK fuel retailer EG's Australian assets, indicating confidence in Australia's liquid fuel market and potentially safeguarding the 109,000 b/d Lytton refinery beyond 2027.
The acquisition comes despite official forecasts of slumping demand for diesel and gasoline, a federal government intent on boosting the numbers of electric vehicles (EVs) on the road, and concerns about the profitability of convenience retail.
Ampol owns 690 company-operated sites in Australia and the acquisition would significantly increase its retail assets. EG's fleet of retail sites would provide some additional sites for Ampol's refined products, although many already stock Ampol fuels. The acquisition indicates Ampol's bearish outlook on EV uptake, especially as Australia has electrified more slowly than previously expected.
The announcement came just days before the release of Ampol's half-year results to 30 June, in which it criticised the Fuel Security Services Payment (FSSP) programme.
The subsidy scheme designed to pay Ampol and fellow domestic firm Viva Energy when refining becomes unprofitable was not working, it said. The calculation used by Canberra to pay 1.8¢/litre when refinery margins drop to A$7.30/bl does not take rising costs into account, Ampol said.
Ampol's sales have dipped in 2025, according to its January-July results released weeks before the announcement. The firm reported 433,000 b/d of sales for the first half of the year, down by 5pc from 458,000 b/d a year earlier.
The move also comes on the back of volatile earnings from its refining operations. Ampol's Lytton refinery margin (LRM) was $7.44/bl in January-June, down by 28pc from $10.27/bl a year earlier. Lytton was taken off line for 10 days in March because of a cyclone, and the LRM fell to $6.07/bl in that quarter.
Stronger fuel demand
Oil product demand will continue to increase until the fiscal year to 30 June 2027 despite a slight downward revision in July compared to expectations in March, forecasts show. Consumption will be 1.08mn b/d in the 2026-27 fiscal year, up from 1.07mn b/d in 2024-25, Australian government commodity forecaster the Office of the Chief Economist (OCE) said.
Population growth and issues with EV infrastructure are limiting factors for EV demand despite a fuel efficiency standard for passenger and light commercial vehicles that commenced in 2025.
Sales of battery EVs and hybrid vehicles accounted for 13.1pc of the market in April-June, up from 9.6pc in April-June 2024, Australian Automobile Association data show.
These numbers remain "well short" of what is needed for a self-sustaining market, Australia's Electric Vehicle Council lobby said in August, calling for tax incentives to remain and no road-user charge to be imposed until sales reach 30pc of the total.
Canberra has opposed attempts to tax EVs to make up for lost revenue due to electrification, seeking to reduce Australia's transport-based emissions to meet its 2030 emissions target of 43pc compared with 2005 levels. Federal fuel excise of around A$0.49/litre of gasoline or diesel purchased is charged, which raises about A$16bn/yr at present.
In comparison with its EG acquisition, Ampol is targeting just 500 EV charging bays in Australia by 2027 after failing to meet its goal of 450 charging bays in Australia and New Zealand by 2024, delivering just 315.
Ampol, one of just two refiners in Australia that can together meet about one fifth of Australia's demand, holds some bargaining power ahead of the 2026 review of the FSSP. The legislation guarantees support for refiners until mid-2027, but Canberra has indicated it wants to retain the sovereign capability.
Australia invested A$250mn into the Lytton and Viva Energy-operated 120,000 b/d refineries to reduce sulphur content in gasoline in 2025 and it will be unlikely that the country will allow its refiners to bail out of local operations anytime soon. Ampol has promised to work with government to map a pathway forward, which may include biofuels.
