Australia heads for second year of record gasoline, diesel imports

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Supply vessels for the offshore gas rigs sit at Darwin port in northern Australia
Supply vessels for the offshore gas rigs sit at Darwin port in northern Australia, April 21, 2017. Picture taken April 21, 2017. REUTERS/Tom Westbrook/File Photo

March 29 (Reuters) - Australia's gasoline and diesel imports are expected to rise 2% to hit a record for a second straight year due to a drop in domestic production and a post-COVID economic recovery boosting fuel demand, traders, analysts and an industry source said.

In the near term, gasoline imports are set to jump due to a roughly five-week outage at a gasoline-making unit at Ampol's (ALD.AX) Lytton refinery in Brisbane followed by maintenance work in May at Viva Energy's (VEA.AX) refinery near Melbourne.

This presents an opportunity for sellers in Singapore and South Korea, whose supplies make up around half of total Australian gasoil imports and nearly 80% of gasoline purchases, data from Wood Mackenzie and Rystad Energy showed.

Australia's growing appetite for gasoline imports, following the closure of two refineries in 2021, is likely to help boost Asian refining margins, which have already more than doubled so far this year.

Imports of gasoline and diesel hit historical highs of about 166,000 barrels per day (bpd) and around 480,000 bpd respectively last year, Australian government data showed.

Australia fuel imports

Ampol's fluidised catalytic cracking unit (FCC) outage is likely to boost gasoline imports by 3,000 bpd on average for the year, according to energy consultancy Wood Mackenzie.

Ampol Ltd (ALD.AX) said on Monday it expected the unit would be out of service until early May.

"The loss of the Lytton FCC reduces the supply of gasoline components by approximately 18,000 bpd, so imports will be increased by at least this level during April and some part of May," Alan Gelder, vice president, refining, chemicals and oil markets at Wood Mackenzie, said.

Singapore refining margins for gasoil and gasoline

Australia's diesel imports are expected to rise about 2% from 2022, partly driven by a 0.6% increase in consumption to about 600,000 bpd, consultancy Energy Aspects estimated.

Adding to import demand, Viva Energy said it plans to shut its 120,000 bpd Geelong refinery for major maintenance towards the end of the first half of this year, with traders expecting that to be in May.

Buyers will need to replenish stocks during this maintenance, supporting demand despite expected slower construction activities during the southern hemisphere winter, a Singapore-based gasoil trader said.

Reporting by Mohi Narayan in New Delhi; additional reporting by Trixie Yap in Singapore; Editing by Florence Tan and Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Reports on everything from how Asia’s fuel use recovers from the fallout of COVID-19 to tracking how the global energy transition impacts refinery expansion plans and fuel supplies in the coming decades. Mohi analyzes data to produce insights into an array of topics spanning refinery operations and profitability through to global oil trade flows and fuel storage. Also, looks at the electrification of the global auto fleet and its impact on fuel supply chains, and the build-out of petrochemical capacity by refiners trying to reduce dependence on fuel sales.

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