Australia continues to rely heavily on imported fuel, raising concerns about how the country would cope if global supply routes were ever disrupted. Around four out of every five litres of the fuel used across the nation now comes from overseas, leaving the economy exposed to sudden changes in international conditions.
A Shrinking Refining Sector
Two decades ago, Australia had enough refineries to meet most of its own fuel needs. Over time, six of the eight facilities closed as they became too expensive to operate, leaving only two still running today. These are Ampol’s Lytton refinery in Brisbane and Viva Energy’s refinery in Geelong. Both sites continue to produce petrol, diesel and jet fuel, providing an important buffer against complete reliance on imported supplies.
Even with these operations, only about twenty per cent of Australia’s fuel requirements are met locally. The rest must be shipped from major refining hubs in Asia, which means Australia depends on long and crowded shipping routes.
Risks to National Security
Recent warnings from senior defence figures have brought the issue back into the spotlight. Concerns include the country’s low storage levels for essential fuels, especially diesel, which powers most transport and freight systems. Government data indicated that Australia recently held about twenty four days of diesel in reserve, a figure well short of international expectations.
Australia is part of the International Energy Agency, which requires member countries to maintain at least ninety days of net import coverage. Australia has not met this requirement for many years. Despite some improvement, the country remains well below the target.
Voices Calling for Change
Some long time advocates for fuel security continue to raise the alarm. They warn that even a temporary disruption to shipping could cause serious shortages. If fuel deliveries stalled for weeks, transport networks would slow down, supermarket shelves could empty quickly and essential services would struggle to operate.
Suggestions for improving resilience include growing domestic refining capacity and exploring alternative fuels that could be produced locally. Others argue that the government needs to take a more active role in supporting a stronger refining industry.
Government Support Keeping Refineries Alive
Australia’s remaining refineries have faced intense competition from huge overseas facilities that operate on a much larger scale and with lower production costs. To keep local refining viable, the federal government introduced a support scheme during the pandemic to help refineries get through periods when losses were unavoidable.
Viva Energy’s refinery alone has received close to forty million dollars through this program. The support has been described as essential for keeping local production alive, since international competitors often produce many times more fuel at significantly lower cost.
The government says Australia is more fuel secure today than it has been in more than a decade, with higher stocks of petrol, diesel and aviation fuel stored across the country. It recently completed a national program that delivered hundreds of millions of litres of new diesel storage capacity, including major tanks at the Geelong refinery that can supply Victoria for about a week.
What Comes Next
Discussions are underway between the government and the remaining refineries about future support beyond 2027. Refinery operators say they do not expect permanent assistance, but they emphasise that targeted help is sometimes needed to keep local capability operating.
As Australia continues to debate its long term energy security, the message from experts is consistent. Every litre of fuel that can be refined or stored locally gives the country more breathing room during times of uncertainty, and strengthens the resilience of the transport and logistics networks that keep the economy moving.
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