Australia’s fuel crisis in the wake of the Iran war just took a turn for the worse after a fire broke out at one of the only two refineries in the country.
Viva Energy’s Corio oil refinery in Geelong, southwest of Melbourne, caught fire late on Wednesday, after reports of explosions. The fire was extinguished on Thursday morning local time after burning for about 13 hours.
The Corio refinery, one of Australia’s two remaining processing plants, supplies more than 50% of the fuel in the state of Victoria and 10% of Australia’s fuel. The refinery can process up to 120,000 barrels of oil per day, manufacturing gasoline, diesel, LPG, jet fuel, avgas, and Low Aromatic Fuel.
Fire Rescue Victoria (FRV) said 50 firefighters worked to extinguish the “large and intense” blaze at the refinery.
According to FRV, an “equipment failure” was the reason for the blaze, while the fire was fueled by a “significant leak of liquid hydrocarbons and gases.”
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Local authorities later said the leak was caused by the mechanical failure of a piece of equipment. Investigation into all the events that led to the large fire was still ongoing as of Thursday afternoon Melbourne time.
The fire impacted the production of gasoline, Australian Energy Minister Chris Bowen said on Thursday afternoon, adding that jet fuel and diesel production continues at reduced levels as a precaution at this point.
“My message to Australians is that this is one part of the supply chain, we continue to make very good progress internationally” to procure fuel, Bowen said and warned against panic-buying.
Australia has moved to protect consumers from soaring fuel prices as a result of the war. Last month, the government halved the fuel excise on gasoline and diesel for three months in a bid to alleviate financial stress from spiking fuel prices.
The Federal Government on Thursday said it had secured approximately 100 million liters of additional diesel, with two shipments coming from Brunei and South Korea. This is the first of the expected shipments of fuel secured under the Government’s new Strategic Reserve powers.
“These cargoes are additional to existing contracted supply, are required to remain in Australia and will be directed to the industries and regions which need them the most,” Bowen said in a statement.
By Charles Kennedy for Oilprice.com
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