Document ID: chunk:federal_register_of_legislation:F2021N00170:reg:6
Version: federal_register_of_legislation:F2021N00170
Segment Type: reg
Provision Reference: reg 6
Character Range: 4377–5977

6  Margin marker
 (1) The margin marker is intended to reflect refining market conditions in a quarter based on prevailing FSSP fuel, fuel oil, crude oil and transport prices. In doing so it should maintain incentives for efficient refinery operations.
 (2) The margin marker should be calculated based on the price of FSSP fuels and fuel oils obtained from Singapore and the cost of shipping those fuels to Australia, less the price of crude oil and the costs of shipping crude oil from Indonesia so that:
 (a) the application of the margin marker to each committed refinery should reflect differences in refinery configuration and the resultant refined product mix/yield; and
 (b) the calculation should be based on verifiable market data to promote investment certainty for each committed refinery.
 (3) The margin marker calculation under subsection (2) should be calibrated to available financial and operational information for each refinery to determine the relationship between the margin calculated by the variables used in the marker and unique operating conditions and estimated actual margins of the refinery. This is known as the basis differential.
 (4) The calibrated margin marker calculation which incorporates the basis differential should then be used to calculate the rate of fuel security services payments for each committed refinery. The difference between the calibrated margin marker for each committed refinery and the 6.4 cpl margin determined by the Minister is the rate of fuel security services payments (up to 1.8 cpl) and reflected in legislative rules under the Act.