Ampol chief warns fuel security’s still fragile

Australian motorists are being warned oil market volatility triggered by the Iran conflict is far from over. EV uptake is increasing, but Ampol’s chief executive says liquid fuels are still crucial, all on the back of the federal government's temporary fuel tax relief ending early next month.

Ampol chief executive Matthew Halliday, speaking to Alan Kohler on the That's Business podcast, said the Iran war had exposed just how quickly disruption to global oil supplies can hit Australian households.

He told the ABC the situation remains delicate despite some signs of stabilisation.

"Even in the last few days we can see that there's been a bit more kinetic activity," he said of the conflict between the USA and Iran, which began back in February 2026.

"Our view is it's going to take some time to ramp [fuel supplies] back up to something like full production, and obviously it depends on how negotiations continue to play out."

The warning comes as drivers face a fresh hit at the bowser, with the federal government's temporary fuel excise cut being phased out in stages.

The 32 cents per litre discount was halved to 16 cents per litre on July 1, 2026, and will disappear entirely on August 3, when the excise returns to its full rate of roughly 52 cents per litre.

The mid-point cut already adds about $11 to the cost of filling a 65-litre tank – a figure that could effectively double to around $22 once the full excise resumes.

The ACCC is monitoring service stations to ensure the current partial cut is being passed on to consumers rather than pocketed by retailers.

Despite the looming increase, pump prices have generally trended down from the peaks seen earlier in 2026 when the conflict first disrupted supply.

Halliday said Australia's declining refining capacity – down from seven refineries in 2013 to just two today – has left the country with thinner fuel reserves to absorb shocks.

He also said local refining capacity had proven valuable when supply was under pressure, since crude could still be secured, increasingly from the United States.

However, he flagged diesel and jet fuel as the country's biggest long-term vulnerability, meaning fuel security will remain a national priority for decades, regardless of how quickly passenger vehicles electrify.

"The bigger challenge for Australia is diesel and jet fuel, where there is no real solution that is economic at the moment," he said.

"So we're going to need fuel security and fuel supply for a long time to come."

Even as the Ampol boss stressed the ongoing importance of liquid fuels, his employer is preparing for the acceleration in electric vehicle sales, with EVs accounting for almost one in five new car sales last month and, when plug-in hybrids are included, close to one in three of all new vehicle sales.

That said, Halliday explained a broader shift to EVs would still take years given the average Australian car is around 11 years old.

However, Ampol believes it has a viable business model during the transition by pairing lower-margin EV charging with its existing petrol station network.

It also wants to expand public fast chargers into shopping centres and existing service stations to capture demand from renters and apartment dwellers who can't easily charge at home.

Separately, Halliday confirmed Ampol is in talks with the federal government about a long-term investment arrangement for its ageing Lytton refinery in Brisbane, which produces about 110,000 barrels a day and has already received close to a billion dollars in upgrades over the past three years.

The company is also examining whether Lytton could eventually produce low-carbon fuels from feedstocks such as canola oil and waste, future-proofing the local refinery.

While wholesale fuel markets have eased from the highs seen during the Iran conflict, it’s clear that big oil companies believe Australia's fuel security challenges are far from over.

With refining capacity continuing to shrink and diesel and aviation fuel remaining difficult to replace, liquid fuels look set to remain strategically important for decades, even as EV adoption accelerates.

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