A sudden 30 percent increase in diesel demand earlier this year highlighted the vulnerabilities in Australia’s domestic fuel supply, prompting calls for a reassessment of national fuel security strategies. The surge, triggered by the escalation of conflict in the Middle East, revealed how global geopolitical tensions can rapidly disrupt fuel availability across regional and remote parts of Australia, affecting farms, freight operations, emergency services, and other essential sectors.

Ampol chief executive Matt Halliday said the episode underscored that fuel supply is not merely a commercial concern but a critical element of national resilience. Australia’s fuel distribution system, designed for steady and predictable replenishment, struggled to respond promptly to the unexpected demand spike, exposing pressure points in the network.

“The impact was felt differently across the country,” Halliday noted, emphasizing that regional and remote communities faced particular challenges due to their longer supply routes and more complex logistics. Nevertheless, he assured that these communities were prioritized throughout the disruption.

Currently, Australia relies heavily on imported fuel, with domestic refining capacity steadily declining over the past two decades. The country’s only operating refineries—Ampol’s Lytton facility in Brisbane and the Geelong refinery in Victoria—account for roughly 20 percent of the nation’s petrol, diesel, and jet fuel production. Halliday stressed the importance of these refineries in providing supply flexibility and faster response capabilities amid global market strains.

“Our Lytton refinery continues to support Australians by enhancing the country’s ability to manage geopolitical tensions and supply chain disruptions,” he said. Diversifying supply sources through local refining helps maintain fuel availability for essential services when international supply chains face pressure.

Ampol’s response during the crisis involved increasing fuel volumes through regional distribution channels, redirecting product and delivery capacity to priority locations, and restoring stock levels at affected sites. The company also coordinated with independent retailers, distributor partners, transport operators, and government agencies to manage local shortages and expedite site recoveries.

Behind the scenes, Ampol’s trading and shipping teams in Singapore and Texas played a crucial role in securing crude oil and refined fuels from a broad range of suppliers. This independent sourcing strategy, free from reliance on specific production sites or partners, provides greater agility in adapting to market disruptions and supply route challenges, supporting both urban centers and regional communities.

The recent turmoil also exposed the financial risks companies face in holding uncontracted fuel inventories, with spot market purchases becoming costlier and less accessible. Ampol’s existing supply contracts helped shield it from some of these market pressures.

In addition to addressing supply chain resilience, Ampol has been expanding its retail footprint following its acquisition of EG Australia, adding around 480 sites across regional and metropolitan areas. The company is growing its U-GO brand—a network of unstaffed, pay-at-the-pump outlets offering competitive fuel prices—which currently includes about 170 sites nationwide, with further expansion planned, especially in regional locations.

While ongoing Middle East tensions leave future fuel supply shocks uncertain, Halliday affirmed Ampol’s commitment to ensuring continued fuel delivery across Australia. The company’s ability to pivot quickly from routine operations to targeted responses during the demand surge was a key factor in managing the disruption.

“As we navigate an unpredictable global environment, our focus remains on reliably serving the transport energy needs of Australians and businesses,” Halliday said.