Australia could see its first new oil refinery built in nearly 70 years as the federal government holds talks with energy companies amid national fuel insecurity.
Prime Minister Anthony Albanese's office has confirmed discussions are underway on whether expanding domestic refining capacity could reduce the nation's reliance on imported fuel, including the possible construction of a new refinery.
If approved, it would be the first oil refinery developed in Australia since the 1960s and could carry a price tag of up to $10billion.
Australia currently operates just two oil refineries, in Geelong and Brisbane, and imports around 90 per cent of its fuel.
That reliance on overseas supply has come under renewed scrutiny amid ongoing conflict in the Middle East and increasing volatility in global energy markets.
To support domestic fuel production, the federal government has amended the investment mandate of the $15billion National Reconstruction Fund, allowing it to assess proposals aimed at expanding Australia’s fuel‑making capacity.
While the fund is expected to prioritise upgrades to existing infrastructure, it has not ruled out backing a new refinery.
Albanese is set to brief state and territory leaders during a National Cabinet meeting on Thursday, with the issue expected to feature prominently on the agenda.
Albanese (centre) will discuss the development of a new oil refinery at National Cabinet
It comes as the government weighs longer-term measures to strengthen Australia's fuel resilience, following fresh disruption at one of the nation's key facilities.
The Geelong refinery is a critical component of Australia's fuel supply chain.
With the capacity to process about 120,000 barrels of crude oil a day, the facility supplies more than half of Victoria's fuel needs and about 10 per cent nationally.
Commissioned in 1954, the refinery produces petrol, diesel, liquefied petroleum gas, jet fuel, aviation gasoline and low-aromatic fuel, according to Viva Energy.
The incident has further highlighted the fragility of Australia's fuel security, given its dependence on just two refineries and imported supply.
Opposition Leader Angus Taylor has seized on the issue, calling last week for Australia to 'accelerate' oil and gas exploration.
'We need to accelerate exploration, getting those small companies out there, innovating and finding those new reserves of oil and gas in this country that can give us the fuel security we need,' he told reporters in Perth.
It follows the fire at the Viva Oil Refinery in Geelong (pictured) one of two left in Australia
Taylor framed the issue as a matter of national security, arguing Australia should be thinking beyond short-term stockpiles.
'We shouldn't be talking about whether it needs to be 30 or 60 days of stockholding in this country, although that's important,' he said.
'We should be talking about whether it's 30 or 60 years' worth that we can extract from under the ground using our great natural resources in this country.'