Australia’s Last Refineries at Risk as Oil Prices Surge
Australia’s final two oil refineries are facing a critical crossroads, with their very survival under scrutiny as global tensions push petrol and diesel prices higher. Viva Energy in Geelong and Ampol in Brisbane are locked in urgent talks with the federal government, seeking increased subsidies to keep their doors open and secure the nation’s fuel supply.
The backdrop is a volatile global oil market. Iran’s effective closure of the Strait of Hormuz—a strategic chokepoint handling nearly a fifth of the world’s crude—has sparked fears of supply disruptions. This, combined with years of rising costs for energy, wages and construction, has put Australia’s remaining refineries under intense financial pressure. Without swift government support, analysts warn, both plants could struggle to continue operations, putting thousands of jobs at risk and leaving the country heavily dependent on imported fuels.
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Australia currently imports around 90 percent of its liquid fuel needs. That reliance has grown steadily as the local refining industry has contracted over the past 15 years. Once a network of postwar refineries dotted the country, but today only Geelong and Lytton remain. The closures of ExxonMobil’s Altona refinery in Melbourne and BP’s Kwinana facility in Perth during the pandemic highlighted just how fragile domestic fuel production has become.
The government’s role is now pivotal. A previous safety net, the Fuel Security Service Payment, helped the two refineries stay operational until mid-2027, but rising inflation and escalating global oil prices have rendered the current framework insufficient. Refiners are calling for adjustments that reflect today’s higher operational costs, while the government has indicated support, recognizing the strategic importance of maintaining a domestic refining capability.
For consumers, the implications are immediate. Diesel prices in regional communities have jumped about 20 percent in the last week and panic buying is beginning to strain supply chains. Even though Australia has stockpiles sufficient for about a month, this falls well short of international recommendations. Any prolonged disruption in the Strait of Hormuz could push petrol and diesel prices even higher, affecting transportation, agriculture and everyday households.
This is not just a domestic issue; it’s a reminder of how closely global events now intersect with local fuel security. The outcome of these negotiations will determine whether Australia retains the ability to produce its own fuels in a volatile world, or becomes entirely dependent on imports.
Stay tuned as we continue to follow these high-stakes talks and monitor the impact on fuel prices and supply across the country. Understanding the decisions made today will shape Australia’s energy security for years to come.
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