Prior to the budget, concerns had been raised by Southern Oil's managing director Tim Rose that the Wagga refinery would be forced to close should the government adopt a recommendation to slash the rebate from the PSO scheme in half, which would have cost the city 35 jobs.

The budget outcome has come as a relief for Mr Rose.

"It really does make the difference between our refinery in Wagga potentially closing or not," he said.

"All of our staff should rest a lot easier knowing this decision has been taken in the budget."

According to Mr Rose, Southern Oil injects $15 million into the region's economy each year.

Member for Riverina Michael McCormack was involved in the lobbying efforts to ensure Southern Oil's future by having the scheme retained as is, and admits it was a difficult fight to save the company.

"It was on the books and in budget time, particularly in times of crisis and the legacy we inherited, everything was being looked at," he said.

"It was a difficult few weeks and I was very relieved the right decision was made - this added up to good business sense and good environmental sense."