Australia refinery fire hits petrol output, raises supply concerns amid Iran war

A fire at the largest of Australia's two oil refineries has hit petrol production, authorities said on Thursday, just as the nation faces pressure to shore up fuel security with the Iran war disrupting global supply.

Firefighters were battling a blaze at Viva Energy's VEA.AX plant that broke out on Wednesday night in a section that produces gasoline. The 120,000-barrels-per-day refinery supplies over half of the fuel needs in Australia's second most populous state, Victoria, and 10% of the country's total demand.

"This is not a positive development, but obviously there's a long way to go in terms of working out just what the impact is," Energy Minister Chris Bowen told Channel Nine.

Petrol production "may be impacted for some time", he told Australian Broadcasting Corp.

The plant is still producing jet fuel and diesel but at reduced levels for safety reasons, he said.

The incident comes as Prime Minister Anthony Albanese visits Kuala Lumpur on Thursday to discuss securing fuel supplies with his Malaysian counterpart, Anwar Ibrahim, following similar trips to Singapore and Brunei.

No injuries have been reported from the fire, which emergency crews were alerted to at about 11 p.m. (1300 GMT) on Wednesday. The refinery is located about an hour's drive from Melbourne.

The cause of the fire and the extent of the damage was not immediately clear, but it comes as Australia has faced mounting concerns over fuel supply since Iran all but closed the Strait of Hormuz after being attacked by U.S. and Israel.

Over the nearly seven weeks since the war began, supply fears have stoked panic buying, doubling demand for fuel in some areas, despite assurances from the government the market is well supplied.

Last month, Albanese announced temporary relief measures including halving the fuel excise and suspending the heavy road user charge for three months to help households cope with a surge in costs driven by the Iran war.

PRODUCTION AT MINIMUM RATES

Viva Energy CEO Scott Wyatt told reporters the primary focus was to completely put out the fire that hit operations at two units at the refinery before assessing damage at the site and safely restoring production.

"All the other units are still operating and still in production but they are at minimum rates to maintain safety across the site," he said.

"We'll only start increasing production again once we're confident that we can do that safely."

Viva's shares on the Australian stock exchange are on a trading halt until Monday or when the company announces the impact from the fire.

Fire authorities said there was no threat to the public, although smoke could affect some nearby areas. Traffic restrictions were in place. Emergency crews were dispatched after multiple calls reporting explosions and flames.