"The Geelong refinery supplies over 50% of Victoria's fuel and approximately 10% of Australia's total fuel."
Incident and Response
A fire was reported at the Viva Energy oil refinery in Corio, Geelong, at approximately 11:00 PM on Wednesday. Fire Rescue Victoria stated that 50 firefighters responded to the incident. The fire was declared extinguished by midday on Thursday.
The Country Fire Authority issued a Watch and Act warning for multiple suburbs in Geelong, advising residents to shelter indoors due to hazardous smoke. This warning was later downgraded.
Fire Rescue Victoria reported the fire was caused by an equipment failure in the refinery's alkylation unit that led to a leak of liquid hydrocarbons and gases. The cause of ignition is under investigation.
Impact on Production and Supply
Viva Energy CEO Scott Wyatt stated the refinery is operating at minimum capacity while the damage is assessed. The company reported that:
- Petrol production fell to approximately 60% of capacity.
- Production of diesel and aviation fuel continued at an estimated 80% capacity.
Viva Energy stated it expects to restore production to over 90% after inspections. The company reported having sufficient fuel stocks for the short term and stated that any longer-term gaps could be bridged by increased imports.
"The company stated it would absorb the costs of the incident and not pass them on to customers."
Background on the Facility
The Geelong refinery, which began operations in 1954, is owned and operated by Viva Energy. The facility can process up to 120,000 barrels of oil per day and manufactures petrol, diesel, LPG, jet fuel, and other products. The company states the refinery supplies over 50% of Victoria's fuel and approximately 10% of Australia's total fuel. It is one of two operational oil refineries in Australia.
Government and Official Statements
Prime Minister Anthony Albanese stated the government would not enact "stage 3" of the national fuel security plan following the incident. He reported that production of diesel and aviation fuel was continuing at 80% capacity, and petrol production had fallen by 40%. The Prime Minister returned early from a diplomatic trip following the fire.
Energy Minister Chris Bowen confirmed the fire would impact petrol production and said the facility would take time to repair. He stated Australia's fuel reserves, as of a recent statement, were at 38 days of petrol, 28 days of jet fuel, and 31 days of diesel.
Victorian Premier Jacinta Allan stated fuel supply was sufficient and urged against speculation. Victorian Energy Minister Lily D'Ambrosio stated the fire had not impacted diesel or jet fuel supplies.
Analysis and Commentary
Kevin Morrison, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), noted that Australia's two refineries produce about one-third of the nation's petrol and that any supply shortfall occurs during a period of tight international markets.
David Leaney, a supply chain expert from the Australian National University, said Victorians might see a petrol price increase within days or weeks but stated the fire was unlikely to have a major national impact.
Professor Richard Brown from Queensland University of Technology noted that refineries are designed with containment measures, and the fire did not spread beyond its initial area.
Former refinery engineer Ross Stidolph stated that major fires at refining facilities in developed countries are "very rare."
Broader Context on Australian Refining
Australia had eight operational oil refineries two decades ago. Six have closed since 2003. The two remaining refineries (Geelong and Ampol's Lytton facility in Brisbane) account for an estimated 10-20% of the country's fuel supply.
"Approximately 90% of Australia's daily fuel consumption is imported as refined product."
Australia has faced fuel security concerns following disruptions to shipping in the Strait of Hormuz. Last month, the Prime Minister announced the government would temporarily reduce fuel excise and remove a road user charge.