Prime Minister Anthony Albanese said the incident at the Viva Energy refinery in Geelong, near Melbourne, will not trigger stricter fuel security measures. The fire broke out late Wednesday due to equipment failure and burned for 13 hours before being brought under control.
The prime minister cut short an official trip to Malaysia to visit the damaged facility on Friday.
The refinery plays a critical role in Australia’s fuel supply chain. It accounts for about 10% of national fuel production and supplies more than half of the fuel used in the state of Victoria. The 120,000-barrels-per-day plant is one of just two working refineries in Australia.
The fire has reduced output but not halted production. Petrol production has dropped to about 60% of capacity. Diesel and jet fuel output have declined to roughly 80% as safety protocols remain active. The company expects production to recover gradually, though it is too early to determine when full output will resume.
Albanese said the situation does not warrant moving beyond stage two of the country’s four-tier fuel security plan. The framework, agreed to by federal, state and territory leaders last month, is designed primarily for global supply shocks. Stage three would introduce voluntary measures to limit fuel use, effectively rationing.
The fire comes at a sensitive time for Australia. The country relies on imports for about 80% of its fuel needs and has been navigating supply uncertainties linked to the war in Iran.
Global oil supply plunged by 10.1 million barrels a day in March, or about 9%, as Middle East producers shut production, according to the International Energy Agency. The Strait of Hormuz, a key shipping route for oil, remains blockaded, further tightening global supplies.
In response, the Australian government is ramping up efforts to secure additional fuel. Albanese announced this week that BP will join a government-backed scheme to underwrite fuel shipments, reducing financial risks for importers. The government has also secured an extra 100 million litres of diesel from Brunei and South Korea.
The prime minister said about 50 fuel tankers are currently en route to Australia. The government has expanded trade arrangements with Malaysia, including fertiliser imports and halal meat exports, as part of broader economic engagement. Further agreements with Indonesia may be announced in coming days.
Energy Minister Chris Bowen had earlier warned that sustained damage to the Geelong facility could affect petrol supply for an extended period. However, authorities have urged the public not to panic-buy fuel.
Australia holds about 38 days of petrol in reserve, according to government figures, well below the 90-day minimum recommended by the International Energy Agency. Diesel reserves are among the lowest of any IEA member country.
The Viva Energy refinery is continuing to operate at reduced levels while crews assess the full extent of the damage. No injuries were reported in the incident.