Geelong Refinery Plans to Return to 90% Capacity

The owner of one of Australia’s only two refineries expects to gradually restore capacity to more than 90% of maximum levels within weeks. This follows a major fire at the Geelong site that crippled key production facilities and heightened concerns about Australia’s vulnerability amid the current global supply shortage.

The latest update from Viva Energy indicates that recovery is proceeding faster than initially feared following Wednesday’s fire, helping to stabilize the outlook for domestic fuel supply security as the conflict in the Middle East continues. With growing hopes for a peace agreement, the price of regular unleaded gasoline at some gas stations has dropped from A$2.50 per liter to as low as A$1.90; Meanwhile, Federal Treasurer Chalmers has indicated that the government is considering extending the 26-cent-per-liter fuel tax rebate, which was originally set to expire mid-year. While acknowledging that the timing could not be worse, the company insists that the impact of the fire will be limited and will not exacerbate fuel shortages for Australian drivers and businesses.

Chalmers noted that diesel prices have not yet reflected the recent sharp drop in unleaded gasoline prices. With fuel reserves stockpiled in storage facilities for over a month and dozens of tankers carrying crude oil and refined fuels scheduled to arrive in the coming weeks, both the fuel industry and the federal government are confident that supplies will remain stable until around mid-year. However, the longer the conflict in the Middle East drags on, the greater the threat of eventual supply shortages.

Some experts have criticized the government’s move to cut fuel excise taxes, arguing that it obscures the price signals that would otherwise encourage drivers to reduce fuel consumption. Chalmers, however, believes that the tax cut has not entirely shielded drivers from the impact of rising fuel prices.