Australia weighs first refinery in 60 years as Middle East war strains fuel supply

Australia is considering building its first new oil refinery in over 60 years, according to Prime Minister Anthony Albanese. This potential project aims to enhance Australia's energy security and resilience, particularly in light of current fuel supply strains caused by the war in the Middle East. The government believes a new refinery could help protect the country from future supply disruptions. If deemed feasible, the large-scale refinery is planned to be constructed by industrial chemical producer Perdaman in Western Australia.

The Australian federal and Western Australian governments will jointly fund a $4 million feasibility study into building a new large-scale petrol refinery in Western Australia, potentially the first in 60 years. This initiative aims to bolster Australia's fuel security and buffer against global oil shocks, particularly in light of escalating conflict in the Middle East and its impact on inflation. Australia currently imports about 90% of its liquid fuels, with only two refineries operating domestically. Treasurer Jim Chalmers has warned of substantial threats to global inflation from the conflict. The proposed refinery project, if it proceeds, would be privately funded by Perdaman but could be eligible for government assistance. This move is part of a broader government strategy to enhance energy security.