Caltex in profit as diesel prices soar

Higher oil prices have hit Caltex’s bottom line, but it still made almost $200 million on the back of increased diesel sales

Higher oil prices have hit Caltex’s bottom line, but the only Australian-owned fuel refinery still made almost $200 million during the first half of the year on the back of increased diesel sales.

Caltex has reported an after-tax profit of $196 million for the first half of 2008, down from $294 million during the same period of 2007.

Caltex Managing Director Des King says the company had benefited from its strategy of growing its marketing business, helping to offset lower refinery production as a result of maintenance and the impact of the stronger Australian dollar and higher crude oil price on refiner margins.

"Caltex recognised early in 2008 the possible negative impact of rising crude oil prices and reduced petrol demand caused by the US economic slowdown and took measures to respond to these challenges," he says.

Growth in marketing earnings was underpinned by higher transport fuels sales volumes of 7.1 billion litres in the first half of 2008.

Sales of regular petrol eased in line with the overall market, but Caltex outstripped the market in growth of diesel, jet fuel and higher margin premium petrol sales.

Diesel sales volumes were 12.8 percent higher than for the first six months of last year, well above industry growth according to King.

He says Caltex also continued its leadership in offering biofuels to customers.

"The company now has over 320 sites in Queensland, New South Wales and the Australian Capital Territory selling Bio E10 unleaded petrol which is blended with 10 percent ethanol and/or New Generation Diesel with 2 percent biodiesel," he says.

Refiner margins still grew strongly in diesel and jet fuels, Caltex reports.

King says the company will further develop its supply chain, including the completion of a new diesel production unit at its Lytton refinery and a number of upgrades to its fuels storage and distribution facilities around the country.

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