Australia has two fuel refineries left. Both made far more money in early 2026 than the year before. Ampol's refinery margin jumped from $6 to $25 per barrel. Viva's nearly tripled. Australians were paying record prices at the pump at the same time. The government stepped in. It halved the fuel tax for three months. It also used public money to back fuel import deals. The fuel companies keep the fuel and sell it. Taxpayers take the financial risk. The government announced 200 million extra litres of diesel. That same day, it said 160,000 people would lose NDIS support. The government says the fuel deals were needed during the Iran crisis. They say the deals kept supply flowing. Refinery bosses say they need profits to invest in their plants. Critics say the public carries the risk. Companies keep the returns. The fuel tax cut ends on June 30. Unless it is extended, prices will go back up overnight.
Ampol’s Lytton refinery in Brisbane had a quarter for the books. The refining margin went from US$6.07 per barrel in Q1 2025 to US$25.45 per barrel in Q1 2026. A 319 per cent jump. At the same time, Australians were paying record prices at the pump.
The numbers are not disputed. They come from Ampol’s own Q1 2026 trading update. Lytton produced 1,434 million litres. That is 10 per cent more than the same quarter a year earlier. Ampol told the ASX it had delivered “a strong and broad-based performance” and highlighted “the strategic value of the Lytton refinery.”
Viva Energy, which runs the other remaining refinery at Geelong, reported similar numbers. Geelong refining margin: US$22 per barrel. Same quarter last year: US$7.90. Nearly tripled.
Scott Wyatt, Viva’s chief executive, sat down with the ABC’s Alan Kohler on April 24 and addressed it head on.
“I mean, the majority of the cost of fuel is represented by the 80 per cent of [oil] that’s being imported,” Wyatt said. He acknowledged “big profit margins” but pointed out the firm had “faced a tough operating environment for years before that.”
Then this. “All those investments are not possible without a profitable business and the support that we get from government from time to time through the fuel security services payment.”
Government support. While discussing record margins.
One month of the quarter was affected by the Iran conflict price spike. The war started February 28. Q1 ended March 31. Most of that margin growth came before the shooting started.
The ACCC announced on March 19 it was taking enforcement action against fuel suppliers for alleged anti-competitive conduct. It had already warned retailers on March 11 to expect heightened scrutiny. The watchdog received more than 500 consumer reports.
The government wades in
March 30. The Albanese government rolled out a National Fuel Security Plan. Three parts. Halve the fuel excise by 26.3 cents per litre from April 1 to June 30. Pass a Strategic Reserve Powers bill giving Export Finance Australia sweeping new authority. Underwrite fuel imports directly through EFA.
The excise cut worked. Prices at the bowser dropped. But it is temporary. Expires June 30. Then the full rate returns, crisis or no crisis.
The Strategic Reserve Powers bill passed Parliament the next day. The ABC reported the powers “could be used for nearly anything facing disruption.” Not just fuel. Critical minerals. Fertiliser. Other strategic goods. Taxpayer funds. Broad authority.
Then the deals started.
April 16. EFA announced its first partnership: Viva Energy. More than 570,000 barrels of additional diesel from Brunei and South Korea. Two shipments. About 100 million litres.
EFA also cut terms with Ampol, Park Fuels, and IOR. On April 15, IOR confirmed its agreement with EFA to bring additional fuel to regional Australia.
April 22. A second announcement. BP Australia and Viva Energy would deliver another 200 million litres. Four shipments. Total additional diesel secured in one week: about 300 million litres, or 1.8 million barrels.
The government’s stated rationale for the deals: these are cargoes that “would be cost prohibitive for private suppliers to source on commercial terms without government support.”
Under these arrangements, EFA provides government-backed financing to import fuel that the companies then sell. The government carries the financial exposure on the import deals. The fuel companies take delivery of the product and sell it at market prices. The government does not take ownership of the fuel.
Energy Minister Chris Bowen: “We are working with industry to shield Australians from global uncertainty and keep our nation moving.”
The companies recording record refining margins are the ones receiving taxpayer-backed fuel import deals. Both. At the same time.
Risk is being shared, but profit is not. Taxpayers underwrite fuel imports for companies that just posted their best refining margins in years.
What else happened on April 22
Same day as the 200 million litre diesel announcement. Same day as the new refinery proposal with energy companies. Health Minister Mark Butler addressed the National Press Club.
His subject: the NDIS. More than 160,000 people would be removed from the National Disability Insurance Scheme by 2030. The government projected savings of $15 billion per year by the end of the decade.
Butler called them “hard decisions.” He said the scheme’s growth rate needed to fall from roughly 20 per cent to 2 per cent per year. The mechanism: new “functional assessments” to determine eligibility. Participants who do not meet the new threshold lose their support.
The fuel announcements dominated the news cycle. The NDIS overhaul ran below the fold. Second and third paragraphs of the daily political wrap. Inside pages.
The two announcements landed on the same day. That is how government communications work - multiple major announcements are often bundled into a single news cycle. Whether the timing was deliberate is a matter of interpretation. What is verifiable is the contrast: on one hand, public funds used to underwrite fuel imports for companies posting record margins; on the other, 160,000 disabled Australians told their government support would end.
The other side
The government’s fuel response has a clear case behind it. The Strait of Hormuz carries roughly 20 per cent of the world’s oil. Australia imports more than 90 per cent of its fuel. When a conflict threatens the world’s most important oil shipping route, the calculus changes fast.
The excise cut provided immediate relief at the bowser. The EFA deals secured actual fuel supply that private markets were not delivering on their own - cargoes that, by the government’s own description, were too expensive for companies to source without backing. No government could sit still during an active supply crisis. Doing nothing would have meant shortages and even higher prices.
Viva’s Wyatt made a reasonable industry argument. Australia’s two remaining refineries are strategic assets. They employ thousands. They supply fuel that would otherwise need to be fully imported. They also lost money for years before margins improved. The Fuel Security Services Payment, a direct government subsidy, exists precisely to keep domestic refining capacity alive because it matters for national security. Without profitability, the argument goes, there is no investment, and without investment, the refineries close.
There are two layers of taxpayer support right now: the ongoing Fuel Security Services Payment and the new EFA import deals. Both exist alongside record margins at both refineries. The industry position is that these are separate things - one is about keeping the refineries open long-term, the other is about short-term crisis supply. Whether that distinction holds up is a question for policymakers.
The counter-argument is straightforward. Risk is being shared, but profit is not. Taxpayers underwrite fuel imports for companies that just posted their best refining margins in years. The fuel imported with government backing gets sold at market rates. There is no windfall tax. No profit cap. No condition requiring companies to pass savings to consumers beyond the temporary excise cut.
The timing of the NDIS announcement alongside the fuel deals drew attention. Government communications teams coordinate multiple announcements in a single news cycle. The fuel story was always going to lead. The NDIS cuts were always going to run second. That is how it works. But the government found money to underwrite private fuel imports. It halved the fuel excise, sacrificing roughly $3 billion in revenue over three months. It passed emergency legislation in days. At the same time, it told 160,000 disabled Australians to find support elsewhere.
The crisis is real. The question is who pays for the response and who pockets the return.
One other thing. A quote attributed to US Defense Secretary Pete Hegseth, that the Strait of Hormuz was “tightening by the hour,” has circulated widely. The verified quotes from his April 16 Pentagon briefing are different. Hegseth said: “This blockade is the polite way that this can go.” And: “For as long as it takes, we will maintain this blockade.” The “tightening by the hour” line could not be verified from official transcripts or CNN coverage of the same briefing.
The way forward
The current arrangements raise structural questions that will outlast this particular crisis. Here are concrete policy options that have been proposed or discussed in similar contexts:
Windfall profit tax or temporary margin cap. During the 2022 energy crisis, the European Union introduced a “solidarity contribution” on surplus profits from energy companies. Australia could apply a similar mechanism - a temporary surcharge on refining margins above a defined threshold during declared crisis periods. The revenue could offset the excise cut cost or fund consumer relief directly.
Condition EFA deals on consumer price pass-through. The current EFA arrangements back fuel imports without requiring that the savings reach the bowser. Attaching conditions - for example, requiring that fuel imported under government-backed deals be sold at a capped margin - would link public support to public benefit.
Build strategic fuel reserves. Australia’s fuel security currently depends on commercial stockholdings and “stocks on the water.” The International Energy Agency recommends 90 days of net imports. A genuine strategic reserve, physically stored in Australia, would reduce the need for emergency import deals in future crises.
Reopen refinery capacity discussion. Australia went from eight refineries to two in a decade. Each closure reduced domestic supply resilience. The government could explore incentives - tax, regulatory, or direct - to attract investment in new or expanded refining capacity, treating it as the strategic asset it clearly is.
Publish all EFA deal terms. The specific terms of the fuel import agreements - pricing, volume commitments, duration, profit-sharing arrangements - have not been made public. Publishing them would allow independent assessment of whether taxpayers are getting fair value.
July 1
The fuel excise cut expires on June 30. The conflict shows no clear sign of resolution. Oil prices remain elevated.
Chris Bowen told The Saturday Paper in early April that securing supply was “a race.” He has said fuel supply is secure through May. Beyond that, the government is buying fuel week by week.
When the excise returns to full rate, the saving at the bowser reverses. Prices jump by 26.3 cents per litre overnight. Unless the government extends the cut. Extending means more forgone revenue. Not extending means fuel prices spike during an ongoing crisis.
Either way, the companies that refine and import Australia’s fuel will continue to operate. Some with record margins. Some with taxpayer backing. Some with both.
The 160,000 people losing NDIS support do not have a Strategic Reserve Power behind them. They have a new eligibility test and a $15 billion savings target.
RIGHT OF REPLY NOTE: Ampol, Viva Energy, Export Finance Australia, and the offices of Energy Minister Chris Bowen and Prime Minister Anthony Albanese were contacted for comment before publication. A 48-hour response window was provided. Any responses received will be published in full.
Sources
- Ampol Q1 2026 Trading Update, Motley Fool, Apr 22 2026
- Ampol ASX Announcement, Market Index
- ABC News - Viva Energy boss defends fuel price surge, Apr 24 2026
- ABC News - Fuel excise halved for three months, Mar 30 2026
- pm.gov.au - Fuel excise halved for three months
- ABC News - Fuel purchasing powers could be used for nearly anything, Mar 30 2026
- EFA Newsroom - First fuel shipments secured, Apr 16 2026
- EFA Newsroom - Securing more fuel and fertiliser, Apr 22 2026
- IOR - IOR and Federal Government fuel agreement, Apr 15 2026
- Guardian Australia - At least 160,000 to be cut from NDIS, Apr 22 2026
- ABC News - More than 160,000 to be kicked off NDIS, Apr 22 2026
- AFR - NDIS to save $15b a year by end of decade, Apr 22 2026
- 9News - NDIS changes: what we actually know, Apr 23 2026
- ABC News - ACCC takes enforcement action against fuel suppliers, Mar 19 2026
- ACCC - Fuel price monitoring during Middle Eastern conflict
- US Dept of Defense - Hegseth/Caine briefing transcript, Apr 16 2026
- CNN transcript, Apr 16 2026
- The Saturday Paper - Chris Bowen on fuel supply, Apr 4 2026
- Reuters - Australia to halve tax on fuel, Mar 30 2026
- Trade Minister - Strategic Reserve Bill passed, Mar 31 2026
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