Treasurer Jim Chalmers has teased “more savings” in the upcoming federal budget while warning Australia is “hostage” to decisions by other countries and developments in the Middle East.
Mr Chalmers appeared on the ABC’s 7.30 on Thursday discussing the recent fire at Viva Energy’s oil refinery near Geelong – one of the nation’s only two remaining refineries – while spruiking his discussions in Washington D.C.
His appearance follows Anthony Albanese securing an additional 100 million litres of diesel from Brunei and South Korea.
Domestic trouble has since erupted at home after part of Viva Energy’s oil refinery in Corio, near Geelong, went up in flames overnight after reports of multiple explosions.
By Thursday afternoon, the blaze had been extinguished.
Treasurer Jim Chalmers spoke on the ABC’s 7.30 Report on how Australia is ‘hostage’ to decisions made by other countries, in the context of the global fuel crisis and Middle East conflict. Picture: NewsWire / John Gass
The facility contributes 10 per cent to the national fuel stockpile and provides Victoria with 50 per cent of its fuel supply. It can also process up to 120,000 barrels of oil per day.
Mr Chalmers said the fire was a “serious setback” and reiterated the importance of the government’s work with key partners all over the world.
RBA deputy governor Andrew Hauser is also in the US and warned the Institute of International Finance that Australians would be poorer as a result of higher fuel costs and interest rates.
In response, Mr Chalmers said the Iran war meant “slower growth and higher inflation” and Australians were paying a “hefty price”.
“They didn’t choose the consequences of that war,” he told 7.30 host Sarah Ferguson.
Part of one of Australia’s only remaining oil refineries caught fire on Thursday, sparking an evacuation. Picture: Supplied
“Those economic implications will cascade through our economy. The cost and consequences of this war are very serious.”
Mr Chalmers said the upcoming federal budget would be a “responsible one” focused on “resilience and reform” – especially in the face of “international shocks”.
“The work that we do here, the engagement that we do with our key partners and colleagues and counterparts is all about making sure we strike the right balances,” he said.
“I’m confident that we can do that.
“I’m not complacent about any of this, because we are, in a very real way, hostage to decisions taken by other countries and developments in the Middle East.”
Speaking from Malaysia alongside that country’s prime minister, Anwar Ibrahim, Mr Albanese said the fire in Geelong led to “very distressing scenes”.
“On a positive note, it is good that there was no workers harmed and no human impact of this fire,” he said.
Mr Albanese said there would need to be an assessment of the impact of the fire.
Shortly after, Mr Albanese announced the first of many expected shipments secured under the government’s new strategic reserve powers.
“The purchase of more than 570,000 barrels of additional diesel has been done by Viva (Energy), made possible because of the decision that my government made early in this global crisis to empower Export Finance Australia,” he said.
Anthony Albanese with Malaysian Prime Minister Anwar Ibrahim. Picture: NewsWire/ Bianca De Marchi/Pool
Mr Albanese said the fuel could be “directed where it is needed most”, including to farmers.
Agriculture was a central figure of Thursday’s press conference.
Mr Ibrahim said Malaysia and Australia had agreed to deepen co-operation, including expertise in production and irrigation to ensure sustainable food supply.
“Let no one mistake the weight of what we signed today,” he said.
“When supply chains are disrupted and food prices are increasing and rising, agreements like this have a direct impact on people’s lives.
“The distance between a sign agreement and a family’s dinner table is shorter than most people imagine.”
Mr Albanese said Australian resources helped to “power our region and our farmers helped to feed the region”.
“Nearly 60 per cent of Malaysia’s wheat and 75 per cent of its lamb and beef come from Australia,” he said.
“Our neighbours know that providing fuel and fertiliser to Australia helps put food on the table in this region.
“We rely on each other for fuels including crude petroleum and natural gas, and Malaysian urea helps Australia grow crops like wheat that we supply here, contributing to Malaysia’s food security.”
Mr Albanese said a partnership had also been agreed to on red meat processing and trade.
The two nation’s energy ministers also agreed to continue working together.
The Viva Energy oil refinery supplies 10 per cent of Australia’s fuel. Picture: Supplied
Emergency services worked overnight to fight the blaze. Picture: Supplied
Speaking a short time later, Energy Minister Chris Bowen admitted Australians “during the day will (have been) very concerned”.
“This is not a positive development. This is not good timing, and this is a setback,” he said.
“But I can assure Australians, the government and industry are working very closely together to manage the impacts of this fire and to ensure ongoing fuel security for Australians.”
Asked whether there was a growing likelihood the government would move to stage three or four under emergency planning due to the blaze, Mr Bowen dismissed it.
“Not directly as a result of this fire,” he said.
Mr Bowen said Viva Energy had confirmed the impact was likely primarily on gasoline and aviation gasoline, but not jet fuel.
“We use about 6,000,000L a month of aviation gasoline, and we have 23,000,000l in stockpile, around 116 days in reserve, he said.
“So, I think that is something which we will be able to manage quite successfully.
“I am pleased to say that diesel and jet fuel production in Geelong remains under way at reduced levels for a period of time as a safety precaution, but we’re confident that we’ll return to strong levels quickly.
“Viva, once the safe orders have been given that it’s safe to investigate and to enter all the relevant sites, we’ll make further assessments at just about what the impact on petrol production will be.”
Mr Bowen said Viva was “confident that they will be able to replace the impacted petrol production with imports” and extra cargo.
Fire extinguished
The blaze in Geelong was extinguished by Thursday afternoon.
The cause was likely valve equipment failure, Fire Rescue Victoria (FRV) Deputy Commissioner Michelle Cowling said.
But she clarified the incident would not impact “diesel or gasoline and petroleum production”.
Speaking before the FRV update, Mr Bowen told the ABC the blaze was “not a positive development”.
“Let’s not pretend somehow that this won’t have some sort of impact,” he said.
“But as I said, we will carefully, methodically, manage it with the refinery, and I and Viva will update Australians with the very best and latest information as and when we determine the full impact.”
He earlier told Seven’s Sunrise “diesel and jet fuel continue to be produced at the refinery”.
“At this point, the impact is mainly on petrol production,” he said.
Viva Energy chief executive Scott Wyatt later confirmed at a press conference that machinery producing petrol would be affected.
“The units that are impacted are in the petrol complex, are part of the collection of units that do make petrol,” he said.
Energy Minister Chris Bowen says he, alongside Viva Energy, will update the public in due course. Picture: Gaye Gerard/ NewsWire
“But there are units that make petrol that haven’t been impacted by this incident as well … but naturally petrol will be one of the products that are potentially impacted depending how we operate the units after.”
Viva Energy also entered a trading halt on the Australian sharemarket after the fire.
The halt was requested pending an announcement from the organisation about the impact of the fire.
Acting Prime Minister Richard Marles, who is the federal member for Curio, advised residents to “keep an eye on advice and listen to emergency services”.
“As far as we understand all workers are okay and accounted for but this has no doubt been a stressful evening for them and for residents in the area,” he wrote.
Earlier, Nationals senator Bridget McKenzie told Seven’s Sunrise she had fears the fire would further strain petrol supplies already under pressure from the Iran war.
As a result, the blaze could have far-reaching consequences for key industries, especially for regional communities that depend on aviation to access essential services, including healthcare, Senator McKenzie said.
The inferno is a “very concerning” development, Nationals senator Bridget McKenzie says. Picture: NewsWire / Martin Ollman.
She described the situation as “absolutely catastrophic” and that Australians would be “worse off” when it came to fuel crisis as a result.
“It’s not just families that are suffering, and as we’ll get to as we go through the news, it’s businesses that are literally going broke,” she said.
“It’s not just the trucking industry, it’s agriculture, construction industry. We are the most dependent nation globally, per capita, on diesel, and so when these type of things happen, it’s going to have a catastrophic flow on impact.
“They’re not going to get (the refinery) up and running tomorrow or next week.”
Mr Bowen has previously said 4.1 billion litres of crude oil, diesel, petrol and jet fuel had been locked in to arrive in Australia over the next four weeks.
Trade Minister Don Farrell earlier told ABC’s Radio National the fire was a “serious issue” and hoped no “serious damage” had been done.
The Iran war has placed immense pressure on Australia’s fuel supplies. Picture NewsWire / Monique Harmer
It was a sentiment echoed by Opposition Leader Angus Taylor who told ABC Brisbane the Viva Energy was a very “important” facility.
“I was deeply concerned when I saw the video of that fire down there,” he said.
While the incident was worrying, Mr Taylor highlighted Australia’s key vulnerability was diesel.
“It’s clearly in the petroleum part of the operation, which if there’s any good news … (because) diesel is what we are most concerned about and should be most concerned about right now,” he said.
“But it’s still a matter of great concern. This is up to 10 per cent of our fuel supply that we rely on. And we need it to be operating at full tilt.”
As of Mr Bowen’s last update, two per cent of Australian petrol stations have run dry of diesel.
Leave a Reply