A fire at one of Australia's only two remaining oil refineries burned for 13 hours on Wednesday night before being extinguished, threatening petrol supplies in a country already struggling with the fallout from the US-Iran war.
The blaze broke out just after 11pm at Viva Energy's Corio facility in Geelong, about 75km south-west of Melbourne, after multiple calls to emergency services reported explosions and flames.
Fire Rescue Victoria said the blaze was contained to the Mogas section – the part of the plant where motor gasoline is produced – an area of roughly 30 by 30m.
Deputy commissioner Michelle Cowling said the cause appeared to be equipment failure, likely a leak or valve malfunction. No one was injured.
The refinery supplies around half of Victoria's fuel and 10 per cent of the nation's total, and processes about 120,000 barrels of oil per day.
Viva Energy chief executive Scott Wyatt said petrol products had been affected and production would not resume until it was safe to do so.
Federal energy minister Chris Bowen said production of diesel and jet fuel were continuing at reduced levels as a precaution. However, petrol production "may be impacted for some time."
He described the timing as "not great" given concerns about fuel security, but said prime minister Anthony Albanese was making progress on sourcing extra supplies from overseas.
"The fact that production of jet fuel and diesel is continuing, but petrol is not, suggest that the fire is in the section of the refinery where the hydrocarbons that are separated from crude oil by distillation are chemically modified to provide higher octane ratings,” said professor Ian Rae, an expert on chemicals in the environment from the School of Chemistry at the University of Melbourne.
Experts warned the fire added pressure to an already stretched system. In recent weeks, over 500 service stations reported dry tanks due to panic buying and distribution issues.
"Any disruption to domestic refining capacity adds pressure to an already tight and globally exposed fuel supply," said Hussein Dia, professor of future urban mobility at Swinburne University of Technology.
"This doesn't mean people will run out of fuel tomorrow, but it does narrow the buffer we have to absorb shocks."
Prof Dia said diesel was the most critical fuel to protect, as it underpinned freight, agriculture and supply chains, and that maintaining diesel supply would typically be prioritised in situations like this.
Professor Sajid Anwar, an economics and finance expert at the University of the Sunshine Coast, said: "Coupled with the cancellation of six oil tankers scheduled for April delivery to Australia, this fire at a processing facility represents a critical stress test for Australia's energy resilience.”
Mr Anwar warned the combined shock was likely to keep interest rates higher for longer, with Treasury modelling suggesting sustained energy costs could push headline inflation towards five per cent by mid-year. The Reserve Bank of Australia raised its cash rate to 4.10 per cent last month partly in response to rising energy costs.
Residents near the site were advised to shelter indoors during the blaze, with a watch-and-act alert issued at 1am local time on Thursday morning (3pm GMT on Wednesday) before being downgraded by 5.30am (7.30pm GMT).
Authorities said hazardous materials teams detected no contaminants in air or water testing. Guy Coulson, director of the Air Quality Collective, said the pollutants from a motor fuel fire were broadly comparable to standing near a busy road.
"For the hopefully short duration of this fire, it shouldn't be particularly harmful for healthy people," he said, adding that vulnerable groups including the elderly, very young, pregnant women, and those with asthma or cardiovascular conditions should take extra precautions.
Victorian premier Jacinta Allan said it was "too soon" to know the full impact of the blaze, and the state's energy minister Lily D'Ambrosio said there would be "no immediate impact on fuel supply," adding that petrol was the easiest fuel type to source from global or domestic markets.
Geelong's mayor Stretch Kontelj described the fire as "unprecedented" in scale.
The Corio facility, which was built in the 1950s, is one of only two oil refineries left in Australia – the other being Ampol's refinery in Brisbane. Australia has significantly reduced its domestic refining capacity over recent decades, increasing its dependence on imported refined fuels primarily from Singapore, South Korea and Malaysia.
Viva Energy said last month it was not reliant on Middle East fuel despite the Iran war, though analysts note that Asian refiners themselves source around 90 per cent of their crude oil from the Persian Gulf, meaning the disruption flows through indirectly.
"This highlights a structural issue," Mr Dia said. "Australia has significantly reduced its refining capacity over recent decades, increasing reliance on long international supply chains. Events like this show how limited redundancy exists when something goes wrong locally."
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