Australia Eyes First Oil Refinery in 60 Years Amid Middle East Conflict
The Australian government is exploring the possibility of building its first new oil refinery in over 60 years, as Treasurer Jim Chalmers warns of a substantial threat to global inflation due to the ongoing Middle East conflict.
A $4m feasibility study will be conducted into constructing a new refinery in Western Australia, which would provide some protection against future global oil shocks. The country currently imports around 90% of its liquid fuels after a series of refinery closures over the past 25 years.
The conflict has led to a surge in oil prices, with Brent crude falling by over $10 a barrel on Monday but still trading at around US$87. Petrol and diesel prices have increased by 25 cents and 50 cents per litre, respectively, this month.
Australia's oil refining industry has struggled to compete with cheaper overseas providers, leaving only two local refineries in operation: Ampol's Lytton refinery in Brisbane and Viva Energy's facility in Geelong. Building a new refinery would be costly, requiring billions of dollars, and may need ongoing government support to stay competitive.