Viva Energy Group Limited (ASX: VEA) has welcomed the Federal Government’s decision to update the Fuel Security Services Payment (FSSP) mechanism. Viva Energy is a leading convenience retailer, commercial services provider and energy infrastructure business with over 120 years of history in Australia. The Group operates a retail convenience and fuel network of over 1,280 stores nationwide and supplies fuels and lubricants to a network of nearly 1,550 service stations.
The government has increased the Geelong Refinery FSSP Margin Marker cap and collar by 3.6 Australian cents per litre (Acpl), which is equivalent to A$5.7 per barrel. The FSSP will be activated when the average Geelong Refining Margin Marker falls below 10 Acpl (A$15.9 per barrel) over a calendar quarter. The maximum support rate remains unchanged at 1.8 Acpl (A$2.9 per barrel) on actual production of key transport fuels, specifically gasoline, jet fuel, and diesel, from the refinery.
The changes to the FSSP aim to better reflect the current cash operating costs, including both operating and sustaining capital expenditure, which have significantly increased since the FSSP’s establishment in 2021. Viva Energy committed to upgrading the Geelong Refinery to produce low sulphur petrol and construct additional diesel storage, investing approximately $500 million in these projects and supporting further storage facilities in Perth and South Australia.
Scott Wyatt, CEO and Managing Director of Viva Energy, stated that the announcement underscores the critical role of domestic refining in strengthening Australia’s energy security. He noted that the Geelong Refinery produces approximately 50% of Victoria’s fuel requirements and holds a significant proportion of the country’s oil and fuel reserves, and the company welcomes the government’s continued support for domestic refining.
