Viva Energy Shares Drop After Geelong Refinery Fire

Stock Price Plummets After Refinery Fire

Viva Energy Group Ltd (ASX:VEA) shares experienced a significant drop of over 6%, reaching a one-month low of A$2.290. The decline followed a fire that disrupted production at the company's Geelong refinery in Victoria last week, leading to a two-day trading halt.

Refinery Production and Supply Impact

The fire, which was contained to the gasoline complex, has temporarily reduced the refinery's output. Viva Energy stated that diesel and jet fuel production will operate at approximately 80% capacity, while petrol production will be at 60%. The company assured that it holds sufficient fuel stocks to maintain normal supply to its customers during this period.

Broader Market and Economic Context

The incident at the Geelong facility, one of only two oil refineries in Australia, occurs amidst heightened concerns over fuel security. The refinery is a critical piece of infrastructure, supplying about 50% of Victoria's fuel. Despite the disruption, Viva reported that refining margins had previously risen due to global supply chain issues, and its crude supply remains secure through July.

Outlook and Recovery

Viva Energy expects to increase production levels for all fuels to over 90% of capacity within the next few weeks. A full review of the damage, necessary repairs, and the overall financial impact of the fire is scheduled to begin this week. Market observers will be closely monitoring the refinery's return to full capacity.

FAQ

Q: What caused Viva Energy's stock to fall?
A: The stock fell over 6% after a fire at its Geelong refinery disrupted production, leading to a two-day trading halt.

Q: How is fuel supply affected?
A: While short-term production is reduced, Viva Energy has stated it has sufficient fuel stocks to maintain normal supply to customers.

Q: What is the significance of the Geelong refinery?
A: It is one of only two oil refineries in Australia, supplying approximately 50% of Victoria's fuel and 10% of the nation's total fuel consumption.

Source: Investing.com