May was an exciting time for Ampol Ltd (ASX: ALD) share price, which gained 11.5% over the course of the month.
The fuel and convenience brand's shares were driven by the Federal Government's announcement of a new Fuel Security Package (FSP) and a decarbonisation strategy.
Let's take a look at the month that's been for the Ampol share price.
What got the Ampol share price powered up in May?
Fuel Security Package
The FSP is being implemented to protect Australia's two remaining oil refineries, one of which is Ampol's Lytton refinery.
Upon receiving the news, Ampol committed to keeping the Lytton refinery open until 2027 – a condition of receiving FSP funding.
The FSP will see the refineries receiving government support if their margin of profit falls to, or becomes lower than, $10.20 per barrel of oil.
The Federal Government will also be providing grants of up to $125 million. The grants are designed to help pay for the upgrades needed for Ampol to produce ultra-low sulphur gasoline.
Additionally, annual variable support payments of up to $108 million are on offer. These are to help Ampol operate the refinery through times of low income.
On the day the FSP was announced, the Ampol share price closed 6% higher than it had the previous session.
Decarbonisation strategy
Ampol also announced a comprehensive decarbonisation strategy in May. The company's strategy involves multiple partnerships and a goal to source 50% of its energy needs from renewables by 2030.
As part of the strategy, Ampol will partner with Tesla Inc (NASDAQ: TSLA) to build Tesla virtual power plants – a network of solar panels and Tesla Powerwall battery systems – at 3 Ampol retail sites.
The partnership will mean Ampol can generate, store, and use solar power across its sites and potentially integrate fast electric vehicle charging to its service stations nation-wide
Ampol will also partner with an unnamed Australian company to develop hydrogen energy solutions to compete with diesel generators – giving Ampol's customers a low carbon diesel option.
Additionally, the company will be installing a green hydrogen production plant at the Lytton refinery.
Ampol has also created 3 emissions reduction goals. These will increase over the coming years.
Initially, the company aims to have 40% of its operations powered by renewable energy by 2025. It also plans to reduce its convenience retail's emissions by 25% and its fuel and infrastructure's emissions by 5% by 2025.
By 2040 Ampol aims to have zero net scope 1 and scope 2 emissions.
Ampol share price snapshot
Its good performance through May has put the Ampol share price back into the ASX green.
Currently, the Ampol share price is 0.74% higher than it was at the beginning of 2021. It's also gained 3.22% since this time last year.
The fuel company has a market capitalisation of $6.8 billion, with approximately 238 million shares outstanding.
