Prime Minister Anthony Albanese has announced a joint plan with West Australia's government to fund a new study into large-scale oil refinery. The refinery is aimed at protecting the country's economy from further global energy shocks. If the refinery goes ahead, it would be the first new large-scale petrol refinery built in Australia since the 1960s. This comes as the cut in fuel excise is due to expire by the end of the week
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TRANSCRIPT
“Now we can see from what's happening in the Middle East with the ongoing conflict that the world is very much an uncertain place. And if Australia just remains at the end of supply chains then that makes us more vulnerable, which is why the key to our budget was making us more resilient, more self reliant; as well as promoting reform.”
That's Prime Minister Anthony Albanese announcing the allocation of $4 million dollars for a pre-feasibility study into a new large-scale oil refinery at Karratha, a city in the Pilbara region of Western Australia.
The project was proposed by fertiliser producer Perdaman - it currently has a $6.4 billion fertiliser manufacturing facility being built there.
The oil refinery to be built in Western Australia would aim to strengthen energy security amid ongoing global tensions.
If built, the facility would be the country's third, and first new large-scale petrol refinery built in Australia since the 1960s.
Mr Albanese says the government is acting to shield Australians from the worst effects of supply chain shocks, as the US-Israel war on Iran continues to impact supply and fuel costs.
“It would create a major boost for local jobs and manufacturing, along with our sovereign capability, and that's what this whole project and this great city is about - it's about building sovereign capability, building resilience, making Australia less vulnerable to these shocks of which we've seen from Feb 28, an extraordinary impact on the global economy.”
When the US and Israel began strikes on Iran on 28 February this year, Tehran closed the Strait of Hormuz, sending shockwaves through the global economy.
The war in the Middle East has largely shut down the Strait, through which around one fifth of global oil and liquified natural gas flow.
Estimates from the US Energy Information Administration suggests that in 2025, about 20 million barrels of oil moved through Hormuz each day.
West Australian Premier Roger Cook says study demonstrates the importance of building sovereign fuel capability.
He says collaboration between the Western Australian and federal governments will help make Australia more resilient and less reliant on overseas fuel supplies.
“In times of global uncertainty, you need a state government and a federal government that are partnering to meet the challenges of the day, ensuring that we can deal with these global shocks, and undertake important projects which very much sets us up for the future.”
The Premier says the study will examine potential sites and opportunities across Western Australia, predominantly in the Midwest and South West, to help secure the nation’s future fuel supply.
Australia currently has two refineries - in Brisbane and Geelong, and both supply roughly 10 to 20 per cent of the country's fuel.
Almost 90 per cent of the country's daily fuel consumption is imported from South Korea, Japan, Singapore, Malaysia and Taiwan.
Foreign Minister Penny Wong told the ABC Australia needs to find ways to mitigate this concern.
“We need to look at what we can do here in Australia to shore up our resilience and four out of six refineries here in Australia closed up under the previous government.”
Australia used to have more domestic oil refineries, but six of eight facilities closed between 2003 and 2021.
This happened after newer, more economical mega-refineries were built across Asia in the 1990s.
Opposition Leader Angus Taylor welcomed the news, saying he supports the oil refinery feasibility study.
But Mr Taylor says Albanese's government needs to release the plan.
“Can I say we've seen almost nothing about it so far. It's a pre-feasibility...We'll see where it goes. We do want to see more refining in this country. We do want to see more, fuel self-sufficiency in this country.”
As Australia is looking to secure energy supply with the oil refinery in WA, this week, Singapore's Defence Minister, Chan Chun Sing, says a newly signed agreement with Australia on energy security and trade reflects the strength of the bilateral relationship.
The Protocol on Economic Resilience and Essential Supplies forms part of an existing free trade pact between the two nations, formalising commitments made during Prime Minister Anthony Albanese's visit to Singapore in April.
Minister Sing says the deal has benefits for both countries.
“And I just want to emphasise this point: that between Singapore and Australia we share a lot of strategic interests. And key to that is between the two of us, we complement each other in terms of our strategic reach and also our strategic resilience. And you can see that being manifested in many of the things that we do. We help each other to extend our strategic reach. We help each other to make sure that we have that resilience in a much more complex world.”
The deal comes at the back of other recent deals - including Prime Minister, Anthony Albanese and India's Prime Minister Narendra Modi signing a uranium deal earlier this month.
India and Australia announced a series of new nuclear, security and defence deals during Narendra Modi's visit to Australia, in hopes of ending more than a decade of delays to regular shipments of the fuel.
Federal Energy Minister Chris Bowen says investing in onshore sovereign fuel refining capability is "sensible and prudent".
Over the weekend, Mr Bowen reassured the nation about Australia's fuel storage, saying the country's fuel supply is secure.
“Obviously the situation in the Middle East continues to be uncertain, but one thing Australians can be certain about is that our fuel supply continues to be solid and secure. And today's Saturday update, I can tell you that we have 42 days worth of petrol, 38 days of diesel, and 32 days worth of jet fuel. All of these figures are more than we had on the day Iran was first bombed on February 28.”
Mr Bowen is currently one of more than 1,500 clean energy industry representatives gathered in Sydney [[Tuesday, 28 July]] to discuss Australia's transition to renewable energy.
The aim of the two-day summit is to bring government and industry leaders together to examine investment, infrastructure and energy policy.
AI data centres are also high on the agenda, following the government's announcement that operators will be required to underwrite their own clean energy supply.
Clean Energy Council spokesperson Chris O'Keefe told SBS News the industry is confident it can support the growth of Australia's data centre sector.
“As an industry, we are very very confident that there are enough projects in the pipeline to ensure that we can power the data centres and the data centre infrastructure that is proposed through Australia. It's not a question of data centre versus renewable energy company, or energy company, we can have data centre and renewable energy company in a partnership working hand in glove.”
Meanwhile the cut in fuel excise is due to expire by the end of the week.
Penny Wong says the federal government wouldn't extend the fuel excise cut.
“As the Prime Minister said, it's not in our current plans to continue the excise, we said it would step down. What we are focussed on is ensuring continued fuel and fertiliser coming in to Australia, and we are calling as so many in the international community are, for there to be ceasefire negotiations and an end to this conflict which have caused so many, global turmoil.”
