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Highlights
- Ampol's Q1 sales dropped over 7%
- International volumes saw a 26% decline
- Refining margins could trigger government support
Ampol (ASX:ALD) has reported a notable drop in its fuel sales volumes for the first quarter of 2025, reflecting ongoing challenges in both domestic and international markets. The company recorded total sales of 6,144 million litres, marking a 7.4% decline compared to the same period last year. A substantial 26% drop in international sales volumes was a major contributor to this decline, signaling weaker global demand or supply chain constraints impacting exports.
The dip in international sales weighed heavily on overall performance, as Ampol continues to navigate a volatile energy landscape shaped by geopolitical tensions, fluctuating oil prices, and changing consumption patterns. The company’s core refining business is also under pressure, with refining margins for March and early April falling to particularly low levels.
These weak margins have placed Ampol in a position where it could potentially qualify for a government safety net under the Fuel Security Services Payment (FSSP) program in the second quarter. The FSSP is designed to provide financial relief to domestic refiners during times when global refining conditions become unprofitable or unsustainable. Should current margin trends persist, Ampol may be eligible for these payments, which serve to stabilize operations during downturns.
While domestic demand has remained relatively steady, the sharp drop in global volumes suggests a broader cooling in international fuel markets, possibly tied to reduced travel activity, tighter environmental policies, or regional competition. The company's refining assets, which play a critical role in Australia's fuel security strategy, are at the center of attention as policymakers and industry players assess the long-term sustainability of local refining capacity.
Ampol has not provided detailed guidance for the remainder of the year but noted that the upcoming quarters will depend heavily on refining margins and fuel demand trends. As the market watches for a potential rebound or further deterioration in the refining space, government support programs like the FSSP could prove essential in bridging gaps during periods of margin weakness.
The developments come amid a broader recalibration in the energy sector, where fuel producers and refiners are balancing traditional operations with a shifting focus toward energy transition, efficiency, and resilience against market shocks.
As the second quarter progresses, attention will remain on Ampol’s performance metrics and the trajectory of global refining conditions, which may continue to challenge margins in the near term.
