Australia Rules Out Fuel Rationing Despite Refinery Fire As Government Moves To Secure Supplies

Australia Rules Out Fuel Rationing Despite Refinery Fire As Government Moves To Secure Supplies

Australia rejects fuel restrictions after refinery fire, ramps up imports and supply deals amid global disruptions from Iran war.

Anthony Albanese has ruled out any immediate fuel restrictions following a fire at one of Australia’s two operational oil refineries, even as the government intensifies efforts to secure fuel supplies amid global disruptions linked to tensions involving Iran.

The prime minister made the declaration on Friday after cutting short an official trip to Malaysia to visit the affected Viva Energy Refinery, located in Geelong, about an hour from Melbourne. The facility was engulfed by fire late Wednesday in an incident authorities described as non-suspicious, occurring within a section dedicated to petrol production.

Describing the blaze as “regrettable,” Albanese said it would not trigger escalation under Australia’s national fuel security framework, stressing that the disruption, while significant, remained manageable within existing contingency plans.

The fire has, however, affected output levels at the refinery. Petrol production dropped to about 60 per cent capacity, while diesel and jet fuel output declined to roughly 80 per cent as safety protocols were activated.

“It has slowed down just slightly because of the circumstances which are there,” Albanese told reporters at the site, expressing optimism that production levels would gradually recover.

The Geelong refinery plays a critical role in Australia’s fuel supply chain, accounting for roughly 10 per cent of national fuel production and about half of the fuel supply in the state of Victoria. The incident comes at a particularly sensitive time, as Australia relies on imports for approximately 80 per cent of its fuel needs and is navigating supply uncertainties tied to global geopolitical tensions.

Energy Minister Chris Bowen had earlier cautioned that any sustained damage to the facility could affect petrol supply for an extended period, underscoring the strategic importance of the site.

Chief Executive Officer of Viva Energy, Scott Wyatt, said it was too early to determine when full production would resume, pending a comprehensive assessment of the damage. Nonetheless, he expressed confidence that supply to the Victorian market would not be significantly disrupted.

Despite the temporary production setbacks, Albanese insisted that the situation does not warrant moving beyond stage two of the country’s four-tier fuel security plan, which was agreed upon by federal, state, and territory governments. He noted that the framework was primarily designed to respond to global supply shocks rather than domestic incidents.

“The event here will not lead to any change,” he said, reaffirming the government’s preparedness to manage potential disruptions.

In parallel, the government is ramping up efforts to bolster fuel reserves and diversify supply sources. Albanese announced that BP would be incorporated into an arrangement with Export Finance Australia, enabling the government to underwrite additional fuel shipments and reduce financial risks for importers.

This move builds on recent supply agreements, including the procurement of an additional 100 million litres of diesel from Brunei and South Korea. The government has also expanded related trade arrangements, including fertiliser imports and halal meat exports with Malaysia, as part of broader economic engagements.

The acquisitions were facilitated under new legislation passed last month, allowing the federal government to absorb the financial risks associated with high-cost fuel shipments, particularly during periods of global volatility.

Albanese’s recent diplomatic tour, which included visits to Singapore, Brunei, and Malaysia, was aimed at strengthening energy partnerships and securing long-term supply commitments. He indicated that further agreements, including potential deals with Indonesia, could be announced in the coming days.