A major fire at one of Australia’s last remaining oil refineries has pushed the nation to the brink of fuel rationing, with experts warning the crisis has struck at the worst possible moment.
MST Energy and Resource analyst Saul Kavonic said the incident at Geelong Refinery was a “massive wake-up call” for Australia’s fuel security, as the country grapples with the fuel crisis.
“This couldn’t have happened at a worse time in the entire history of Australia’s fuel sector,” he said.
The fire broke out about 11pm on Wednesday in the refinery’s petrol-producing “Mogas” unit, triggered by an equipment failure, and burned for more than 12 hours before being brought under control on Thursday afternoon.
The plant is expected to be closed for weeks, cutting off a critical supply line that delivers approximately 10 per cent of Australia’s fuel and up to half of Victoria’s supply.
Mr Kavonic said the timing of the outage could not be more severe, with Australia already relying on shipments of fuel that left the Middle East before the escalating conflict disrupted global supply.
“The disruption to the Geelong refinery is happening exactly as the global fuel crunch is about to hit us,” he said.
“That fuel runs out in the coming weeks, and that’s when the real crunch point is going to hit.”
He warned that the incident has significantly increased the likelihood of fuel rationing, as authorities scramble to manage supply in a tightening market.
“That risk has gone from a possibility to much more plausible,” he said.
“If we do go down the path of demand management measures or rationing, you actually need to put them in place before the physical shortage arrives.”
‘NOT NORMAL TIMES’
Over the past few weeks, the Albanese government has been racing to secure additional fuel shipments, engaging in urgent diplomatic talks with key trading partners across Asia and beyond to keep supply flowing into Australia.
Emergency powers are also being used to underwrite fuel imports, allowing Canberra to financially back cargoes and help companies.
But Mr Kavonic warned that those efforts may not be enough, with countries around the world beginning to prioritise their own supply.
“This is not normal times, where just because you have a contract … that fuel will arrive,” he said.
“This is a time of crisis and politics is going to get involved.”
Australia has already begun sourcing fuel from as far afield as the United States and northern Europe, a move he described as “very abnormal behaviour” and a sign of how tight supply has become.
“I’m less worried about the cost … I’m worried that we may not be able to get fuel at any price,” he said.
Victoria is expected to feel the impact first, with the Geelong refinery supplying a large portion of Victoria’s fuel.
“It’s going to be really hard to scramble fuel to where it needs to go across the state,” Mr Kavonic said.
“I am quite concerned about businesses and industry in Victoria … which may not be able to get it in the coming weeks.”
Australia has just two remaining refineries, with Queensland’s Ampol Lytton Refinery already running at full capacity.
Mr Kavonic explained that every litre lost from Geelong will need to be replaced through imports.
“So every drop of fuel that the Geelong refinery won’t be able to produce is now going to have to be imported,” Mr Kavonic said.
Extracted in full from: https://www.dailytelegraph.com.au/motoring/australia-faces-fuel-rationing-risk-after-massive-fire-cripples-geelong-refinery/news-story/52b26d1112ffc7ac163a73e4be96bc90
