SYDNEY/MELBOURNE: Australia will bring forward by six months a payment to support the country's three remaining oil refineries to help tide over the financial hit from the coronavirus pandemic, Energy Minister Angus Taylor said on Monday.
Australia's refineries are reeling from a slump in demand triggered by international travel curbs and local lockdowns due to Covid-19 this year, racking up losses which they say threaten the future of their plants.
"The Covid-19 pandemic continues to place immense pressure on our refineries and the many Australians employed in the fuel sector," Taylor said.
"The production payments will help the industry withstand the economic shock of this crisis, protecting local jobs and industry, bolstering our fuel security and shielding motorists from higher prices."
Taylor said the support, announced as part of a A$2.3 billion ($1.7 billion) comprehensive fuel security package in September, will now begin on Jan. 1, 2021 versus July 1.
The support will be provided through a minimum one cent payment for each litre of petrol, diesel and jet fuel from the domestic refineries that continue operations in Australia.
Refiners must agree to continue to run at least through June 2021 to receive the payment, worth A$83.5 million over the first six months.
Viva Energy, operator of what will be Australia's largest remaining refinery as of April 2021, said it would take the payment, which would boost its underlying refining earnings for the six months through June 2021 by A$30 million.
Viva still plans to make a decision this month on the long term future of its Geelong refinery, a spokesman said.
Exxon Mobil Corp, owner of the country's smallest and oldest refinery, said it was evaluating the government package.
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