Ampol, the largest oil refiner in Australia, has announced that a technical problem in its oil refining unit will lead to a reduction in petrol production for over a month, costing the company up to $50 million.
The issue was detected in the slide valve of its fluidised catalytic cracking unit, which creates petrol and distillate fuel from larger molecules, forcing the company to shut down its operations for repairs.
The FCCU, located in the Lytton refinery in Queensland, will likely take several weeks to fix, with full operation expected by early May. While Ampol has stated it will source alternative supplies for its customers through its trading team, the outage will likely cost between $30 million and $50 million, including the cost of repair and lost opportunity cost from the sale of petrol at higher product cracks.
However, the company said that production of diesel and jet fuel would be largely unaffected. Shares in Ampol fell more than 2% after the announcement, hitting a two-month low, before rising later in the day.
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