“An oil refinery fire has potentially extremely serious impacts on environment and human health depending on the infrastructure and chemicals involved, and the incidence response. This is a hazardous event with immediate air pollution effects of increased particles but also sulfur dioxide and other harmful volatile organic compounds which may cause respiratory and other health effects in exposed populations. Soil and water may also become contaminated with hydrocarbons and metals if the area is not well contained”.

"The Geelong refinery incident introduces a supply-side constraint, as this refinery provides approximately 10% of Australia’s national fuel output [1]. While national reserves (28 days for jet fuel, 31 days for diesel, and 38 days for Gasoline) provide a buffer [2] and may prevent a broader crisis, short-term demand-side disruptions and localised price pressures remain possible.

The operational outlook of national fuel supply chain resilience will depend on scaling and diversifying refined fuel imports to compensate for domestic production losses, while maintaining coordinated inventory management, optimal fuel allocation, and financial support mechanisms for domestic refining capabilities. Additionally, refinery fires of this nature typically result in short-term environmental disturbances, particularly through air quality degradation from combustion emissions.

In this case, the dense smoke plume and assessment of water contamination suggest potential short-term public health risks, although no health incidents have been reported to date. Such events may also lead to longer-term environmental impacts, including soil and water contamination from persistent compounds (e.g., Polycyclic Aromatic Hydrocarbons) and associated ecosystem effects; however, no evidence currently confirms these outcomes, which remain contingent on the duration of the incident and the effectiveness of containment and remediation.

These environmental uncertainties are likely to elevate risk perception and public anxiety, triggering precautionary behaviours such as panic buying and fuel hoarding, and amplifying perceived shortages. This is particularly critical as Australia is already experiencing tight supply conditions (Stage 2) due to disruptions around the Strait of Hormuz. Clear and timely government communication through media is essential to manage public response and mitigate panic buying behaviour."

[1] https://www.vivaenergy.com.au/operations/geelong
[2] https://www.dcceew.gov.au/energy/security/australias-fuel-security/minimum-stockholding-obligation/statistics

"It is too early to evaluate the impact of the accident on the fuel supply without knowing the extent of the damage. If the production cannot be restored within days, it will have material and psychological impacts on the fuel market in terms of price and availability.

Victoria and diesel markets are likely to be affected the most for a different reason. 50% of Victoria’s fuel supply comes from that plant, so even a temporary disruption in supply can push up the price and exacerbate the existing shortage. I expect the number of petrol stations without fuel to keep on rising and price hikes to follow unless the government takes action. If there is a material damage on production capacity, government needs to consider fuel rationing or emergency release of fuels to make up for the shortfall of the supply.

This is another wake-up call about fuel security and fuel diversification. We have been talking about alternative fuels such as low-carbon liquid fuels for ages, but investment has been slow. It is time for government to commit on policies to secure the future of Australia-made renewable fuels so that we will be in a better position when the next fuel crisis hits."

"What we are seeing in events like this is not just a physical disruption but a behavioural shock to the system. When a highly visible incident occurs, particularly one involving fire or infrastructure, it elevates perceived risk and uncertainty, which can trigger precautionary purchasing even when supply chains remain largely functional. Evidence from COVID-era research shows these responses are driven less by actual scarcity and more by anticipated regret and loss aversion, where people act to avoid the possibility of running out rather than responding to current need (Sheu & Kuo, 2020; Yuen et al., 2020).

This is where communication becomes critical. The evidence is quite clear that vague reassurance is less effective than specific, operational detail. Governments and industry bodies can stabilise behaviour by providing concrete information such as current stock levels, delivery schedules, and how supply is being prioritised across regions. Research on risk communication shows that transparency and specificity reduce uncertainty and dampen panic-driven demand spikes (Van Bavel et al., 2020).

Without that level of detail, people tend to fill the gaps themselves, often assuming worst-case scenarios, which can create the very shortages they are trying to avoid. Ahead of the ANZAC long weekend, where demand is already elevated due to travel and routine stockpiling, this effect is amplified.

The most effective response at both the individual and system level is to maintain normal purchasing patterns and rely on existing supply cycles. Over-purchasing does not increase total availability, but it does increase the likelihood of uneven access across communities."

"Equipment failure is not uncommon in oil refineries, where operations involve high temperatures, high pressures, and flammable hydrocarbons. Failures in components such as pipelines, valves, or heat exchangers, often due to ageing, corrosion, or seal degradation, can lead to leaks that may ignite in the presence of an ignition source. Particularly, the involvement of the large LPG-containing tower adds complexity.

As one of the few remaining refineries in Australia, any disruption may tighten fuel supply and place short-term upward pressure on petrol and diesel prices. Environmentally, the fire may release pollutants that temporarily affect air quality, while poorly managed runoff could lead to potential secondary soil or water contamination. Ongoing monitoring and transparent communication will be essential."

"Australia’s two remaining oil refineries collectively account for approximately 10–20% of the nation’s total fuel supply. As such, a disruption at a single refinery is expected to affect only a limited portion of overall domestic fuel availability.

It is important to recognise that Australia relies heavily on imported refined fuels, with the majority sourced from international suppliers including Singapore, South Korea, and Malaysia. This diversified supply chain provides a degree of resilience against short-term domestic disruptions.

The affected refinery, constructed in the 1950s, represents aging infrastructure. Oil refining is inherently a high-temperature, high-risk industrial process. It involves heating crude oil to approximately 350–400°C in furnaces, converting it into vapour, and subsequently condensing it into fractions with different chemical compositions.

These operating conditions, combined with the potential for equipment degradation over time, can increase the likelihood of incidents such as fires if not carefully managed through maintenance and safety systems."

"The fire at the Geelong refinery is a significant incident because it affects one of only two remaining oil refineries in Australia, supplying around half of Victoria’s fuel and approximately 10% of national demand. While it is still early and the full impact is not yet clear, any disruption to domestic refining capacity adds pressure to an already tight and globally exposed fuel system.

Australia relies heavily on imported refined fuels, so supply will continue through international markets. However, the loss or reduction of output from a major domestic refinery reduces flexibility and resilience in the system. This doesn’t mean people will run out of fuel tomorrow, but it does narrow the buffer we have to absorb shocks.

It is also important to distinguish between fuel types. Early indications suggest petrol production is most affected, while diesel and jet fuel are continuing at reduced levels. Diesel is particularly critical because it underpins freight, agriculture and supply chains. In situations like this, maintaining diesel supply is typically prioritised to keep essential services operating.

This incident is occurring at a time of heightened global uncertainty in energy markets, including disruptions to major oil supply routes. When you combine global pressures with a domestic incident like this, it exposes how tightly interconnected the system has become. Fuel supply is not just about imports, but also about the level of domestic capacity available to process and distribute it.

From a broader perspective, this highlights a structural issue. Australia has significantly reduced its refining capacity over recent decades, increasing reliance on long international supply chains. While those systems are generally reliable, events like this show how limited redundancy exists when something goes wrong locally.

In terms of environmental and health considerations, refinery fires can generate smoke containing hydrocarbons and other pollutants, which can affect air quality in surrounding areas. Emergency responses typically prioritise containing emissions and protecting nearby communities, but short-term exposure risks depend on wind conditions, duration of the fire, and the substances involved. Public health advice, such as staying indoors and limiting exposure, is an appropriate precaution.

Overall, this is not a crisis in itself, but it is a reminder of how sensitive fuel systems can be to both global disruptions and local incidents. It reinforces the importance of managing supply carefully, prioritising critical uses, and strengthening resilience by reducing our reliance on liquid fuels over the longer term."

"Coupled with the cancellation of six oil tankers scheduled for April delivery to Australia, this fire at a processing facility represents a critical stress test for Australia’s energy resilience.

This double energy shock is a major wildcard for Australia’s inflation outlook, and it's likely that interest rates will remain higher for longer as a result.

The International Energy Agency warns that even if international hostilities cease immediately allowing our refined fuel supply from Asia (which is 90% dependant on Persian Gulf crude oil), the global shock to both oil and natural gas supplies could persist for six months. Treasury modelling suggests this sustained elevation in energy costs could push headline inflation toward 5 percent by mid-year.

Consequently, the Reserve Bank of Australia raised the cash rate last month to 4.10% to prevent these costs from embedding into supply chains.

With households facing a 'double whammy' of record fuel prices and rising mortgage repayments, the risk of a broader economic contraction has intensified, making responsible consumer behaviour - such as avoiding panic buying and adopting fuel-efficient driving -essential to stabilising the market.

Over the longer term, improving fuel storage capacity, diversifying energy sources, and expanding electrification of transport would strengthen Australia’s economic resilience to global energy shocks."

"We are now seeing in real time how vulnerable Australia is to international as well as domestic interruptions to fuel supply. 

A biofuels industry could help Australia could buffer us from these vulnerabilities in future. 

Australia currently has the capacity to produce somewhere between 400,000 and 500,000 litres a year of biofuel and we are only using about 30 percent of the capacity. With no change in infrastructure or fuel rules this capacity could be scaled up quite quickly and be added to fuel supply as blend.

Longer term opportunities lie in stable, supportive policy alongside investment in scaling sustainable biomass supply to work with technology that is proven in global markets. Investors, industry and researchers need to work together to build a biofuels solution and we are excited to be working towards this now at UniSC. 

While large-scale biofuel production can’t be switched on overnight, biofuels can provide Australia with future sovereign fuel capability and reduce potential exposure to global shocks, particularly for aviation, shipping and heavy industry, where alternatives like batteries are decades away.

Without taking steps towards new energy options, Australia will continue to face the same vulnerabilities any time global diesel markets tighten."

"There are probably two main concerns with this fire - Will it affect fuel availability, and will it affect the health of the environment and/or people in the vicinity? 

Early reports indicate that diesel and jet fuel production may not be affected, but the fire is in the petrol producing part of the plant. If this is the case then there will likely be some sort of effect on petrol production but there are other sources of petrol that might be able to make up for any shortfall. Until we know the extent of the damage to the facility we don’t know what the effects might be, and it is not helpful to guess.

The environmental effects are a little bit harder to ascertain. On one hand, oil refineries do have a lot of potentially toxic chemicals in them but the key word is ‘potentially’. Any discussion of toxicity is meaningless without context, e.g, how much of a chemical someone was exposed to, and for how long etc.  

Any major chemical processing facility will have detailed safety systems and plans in place in case of such emergencies and I am sure these are being followed. Again, until we know what was there and what exactly has happened e.g. what, if any chemicals, have left the site it is not helpful to guess possible effects.

The best course of action at this stage is to let the emergency services and environmental regulator do their job and hold off until we have more knowledge of the situation once the fire is out and people can get on site to see the full extent of the damage. It is probably not helpful to speculate on possible outcomes at this stage."

"The fact that production of jet fuel and diesel is continuing, but petrol is not, suggest that the fire is in the section of the refinery where the hydrocarbons that are separated from crude oil by distillation are chemically modified to provide higher octane ratings."

"As reported the fire is in the MoGas section, meaning very likely where the 95 RON fuel is processed after the initial refining of gasoline or petrol in general."