A significant industrial fire at one of Australia’s last remaining oil refineries has crippled at least a fifth of the facility’s production capacity, sparking urgent discussions regarding the nation’s fragile fuel security. The Viva Energy refinery blaze impacts petrol production and has raised the possibility of the federal government triggering emergency measures to ensure a steady supply of fuel to the public.
The blaze, which broke out late Wednesday at the Geelong refinery on the shores of Corio Bay, was caused by an equipment fault. According to the company, the fire damaged two critical petrol-producing units, effectively wiping out approximately 20 per cent of the plant’s total output. This disruption comes at a precarious time; since the outbreak of conflict in Iran on February 28, the facility has been running at maximum capacity to meet soaring demand.
Currently, the Geelong refinery is a linchpin of the regional economy, producing as much as 50 per cent of the petrol, diesel, and jet fuel used in Victoria daily, and accounting for roughly 10 per cent of the national total. Even as the facility can process up to 120,000 barrels of crude oil per day, the loss of these specific units forces the plant to operate at reduced capacity for the foreseeable future.
Despite the immediate loss of production, Viva Energy executives have attempted to calm markets, and consumers. Chief Executive Scott Wyatt described the incident as “exceptionally challenging” but maintained a “high level of confidence” that the company can offset the shortfall by increasing imports. Wyatt noted that the company has cargoes arriving through the finish of May and will begin rolling forward June shipments to bridge the gap.
A ‘War Zone’ in Corio: The Midnight Blaze
The incident began with a mechanical failure in the refinery’s piping, according to Fire Rescue Victoria (FRV). The resulting fire was characterized by a series of explosions and flames that reached heights of up to 60 metres. For those on the ground, the scene was described in harrowing terms.
Tony Hynds, an organiser with the Australian Manufacturing Workers Union, reported that approximately 30 people were on-site when the first explosion occurred. Workers were forced to evacuate rapidly as a massive fireball erupted. Ronnie Hayden, secretary of the Australian Workers Union, likened the scene to a “war zone,” quoting workers who described a “big bloody fireball coming straight for us.”
The scale of the disaster was narrowly avoided. FRV Deputy Commissioner Michelle Cowling stated that the blaze could have been “catastrophic” had it started near the plant’s fuel storage tanks. A combined force of 50 firefighters and 50 Viva employees battled the flames for 13 hours, extinguishing the fire just after midday on Thursday and limiting the damaged area to 50 square metres.
Local residents reported feeling the impact of the explosions as early as 1 a.m. One Corio resident described waking up to their house rattling and seeing an “ominous red glow” that lit up their entire backyard. A precautionary smoke warning was issued for several suburbs at 2 a.m. Following a wind change, though FRV Assistant Chief Fire Officer Mick McGuiness later confirmed there were “no contaminants whatsoever” in the smoke.
Bridging the Gap: Imports and the Middle East Crisis
The Viva Energy refinery blaze impacts petrol production at a time when Australia’s fuel security is already under significant strain. The ongoing conflict in the Middle East has disrupted shipping in the Strait of Hormuz, a vital artery for oil and gas tankers. Experts warn that this has cut off substantial volumes of crude oil from the Persian Gulf, which typically feed the large Asian refineries that Australia relies on for 80 per cent of its fuel imports.
Refinery manager Bill Patterson noted that while the damaged units are key for long-term operations, they are relatively compact in the overall scheme of the plant. He clarified that the lost material is an ingredient for petrol, but not one the refinery cannot function without. Crucially, the production units for diesel and jet fuel remained unaffected—a relief for the government, as those fuels are in much tighter supply than petrol.
Viva Energy leverages a network of shipping terminals and a partnership with Vitol, one of the world’s largest oil traders, to maintain supply. Together, Viva’s operations provide roughly 30 per cent of Australia’s total fuel needs. For more information on current fuel standards and security, the Australian Department of Energy provides oversight on national reserves.
The Fragility of National Fuel Independence
The incident highlights a systemic vulnerability in Australia’s energy infrastructure. Over the last decade, a wave of refinery closures—including plants operated by BP and ExxonMobil—has left the country with only two remaining refineries. These local plants struggled to compete with the massive, lower-cost “mega-refineries” in South-East Asia.
To prevent a total collapse of domestic refining, the federal government has provided significant financial backing. In March, the government boosted the Fuel Security Services Payment, a scheme introduced in 2021 to support refineries during loss-making periods. Viva Energy stated that this support enabled a $500 million upgrade to the Geelong site.
Despite this, the fire has reignited fears of a supply crunch. Global research firm Rystad Energy suggested the incident increases the likelihood of the government moving to the next stage of its fuel-saving strategy. This could include directing fuel to priority sectors, encouraging carpooling or working from home, and releasing further stocks from strategic reserves.
Victorian Premier Jacinta Allan acknowledged that the government might need to progress the national fuel security plan, depending on Viva’s damage assessments. However, Federal Energy Minister Chris Bowen has pushed back against the idea of drastic measures, stating that because Viva is confident in its ability to replace lost petrol with imports, the fire “in and of itself – won’t lead to a change in the status of the four-point fuel plan.”
As of the most recent government update, Australia’s fuel reserves stood at 38 days for petrol, 31 days for diesel, and 28 days for jet fuel.
Viva Energy is expected to provide a detailed timeline for repairs and a plan for the production ramp-up this coming Monday. Until then, the facility will continue to operate at minimum rates as engineers conduct a full damage assessment of the affected piping and units.
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