Prime Minister Anthony Albanese is set to announce a $4 million pre-feasibility study for a new large-scale oil refinery in Karratha, Western Australia, on Tuesday. This initiative marks Australia's first consideration of a new petrol refinery since the 1960s, aiming to enhance the nation's sovereign capacity for fuel production.
The proposed facility would be developed by Western Australian industrial company Perdaman and is projected to generate thousands of local jobs. It would join Australia's two existing refineries located in Brisbane and Geelong. However, the refinery would still depend on imported crude oil for its operations, offering only partial insulation from global supply shocks.
Resources Minister Madeleine King stated that crude oil, unlike refined fuel, is significantly more storable, which would contribute to sovereign capacity, particularly on the west coast. The project is part of the federal government's $10 million commitment to supporting feasibility studies for new or existing fuel refining capabilities, announced as part of a broader $15 billion fuel security package.
The push for increased domestic refining capacity comes in the wake of global oil price surges and supply chain disruptions, exacerbated by the ongoing US-led conflict impacting the Middle East and critical oil transit routes like the Strait of Hormuz. About one-fifth of the world's oil passes through this vital waterway.
Energy Minister Chris Bowen described investing in onshore sovereign fuel refining as a "sensible and prudent" step. The government has been actively working to secure Australia's fuel supply, with the Prime Minister recently visiting regional partners such as Singapore. While the majority of Australia's fuel is imported, reserves have reportedly increased since the conflict began.
The opposition coalition has indicated support for the new refinery but suggests pairing it with increased efforts in alternative fuel sources, such as biofuels. West Australian Premier Roger Cook emphasized that the refinery would help rebuild the state's capacity to produce and distribute its own fuel, including diesel for regional communities, addressing ongoing concerns about fuel security.
