The share prices of both Viva Energy Group Ltd (ASX: VEA) and Ampol Ltd (ASX: ALD) have been quite erratic over the last 12 months.
Viva Energy is one of Australia’s leading energy companies and operates the Geelong refinery in Victoria.
Ampol is the nation’s leader in transport fuels, supplying Australia’s largest branded petrol and convenience network.
VEA share price
ALD share price
Fuel security package
The federal government announced it will offer a helping hand to protect hundreds of jobs at both the Ampol refinery in Lytton and the Viva Energy refinery in Geelong.
The two refineries will be offered up to 1.8 cents per litre of fuel they produce until 2030.
It’s a $2 billion package with around $300 million being allocated to refinery infrastructure upgrades to enable low sulphur fuel production.
These measures were brought in place on the back of concerns about Australia’s fuel security due to refinery closures by BP plc (NYSE: BP) and ExxonMobil (NYSE: XOM).
What now for Viva Energy and Ampol?
The recent closures of oil refineries is a strong indicator of an industry in decline as energy companies embark upon renewable sources of energy instead.
As part of the Rask Investment Philosophy, I prefer to focus on businesses that operate in structurally growing industries.
Whilst it’s encouraging to see the government providing assistance, it seems like it’s slowing down the inevitable long term fate for oil refineries.
If you are on the hunt for ASX growth shares, I’d recommend signing up for a free Rask account
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