The Australian conservative coalition government has brought forward its plans to provide financial support to the country’s petroleum refining sector by starting payments from January 1, 2021, instead of the original start date of July 1, 2021.
The financial support, known as the interim refinery production payment, will be provided through a minimum A1¢ payment for each litre of gasoline, diesel, and jet fuel from the major domestic refineries who continue operations in Australia, Australian energy minister Angus Taylor said.
To receive the payment, refineries must agree to continue to operate for the duration of the programme, Taylor said. Taxpayer support is also contingent on refineries committing to an open book process and long-term self-help measures to further inform the development of the long-term package, the minister said.
The interim payment will be replaced by the longer-term financial assistance to the sector where Australian taxpayers will pay A1.15¢ a litre of refined product produced in Australia. Refiners, in return, will commit to hold minimum stocks of gasoline and jet fuel in Australia to improve fuel security. Canberra also plans to spend A$200mn to build additional diesel storage capacity across Australia, as it continues its efforts to meet its International Energy Agency strategic reserves commitments.
Australian refiner and marketer Viva Energy has welcomed the new financial support. Viva will participate in this interim programme and estimates that the new payment will contribute about A$30mn to underlying refining profit before interest, tax, depreciation and amortisation from January 1 – June 30, 2021 based on average historical refining output during calendar 2019.
For more information visit www.australia.gov.au