Australia loses another oil refinery

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In the space of four months, Australia has lost half of its remaining oil refineries. In October, BP announced it was closing its Kwinana oil refinery in Perth and converting it into a fuel import terminal, the ABC’s Gareth Hutchens reports.

The oil major said the refinery — Australia’s largest — was no longer economically viable.

Now, a few months later, ExxonMobil has announced the closure of its Altona oil refinery in Melbourne, saying it was no longer economically viable.

BP blamed the regional over-supply of fuel and the growth of mega-refineries in Asia and the Middle East that had structurally changed the regional fuel market, saying Kwinana couldn’t compete with those overseas refineries anymore.

Its decision meant the number of oil refineries in Australia would decline from four to three.

Now, a few months later, ExxonMobil has announced the closure of its Altona oil refinery in Melbourne, saying it was no longer economically viable.

It, too, will be turned into a fuel-import terminal.

ExxonMobil’s decision will leave Australia with just two oil refineries.

Meanwhile, Australian fuel giant Ampol, which owns an oil refinery in Brisbane — one of the last two remaining in Australia (with the other being Viva Energy’s oil refinery in Geelong, Victoria) — is reviewing whether to keep its refinery open or convert it into a fuel import terminal, too.

It’s an inexorable decline for the industry.

Roughly 20 years ago, Australia had eight refineries that met virtually all of our domestic demand for refined fuel.

What does it mean for Australia’s fuel security?

According to Dr Hunter Laidlaw from the Parliamentary Library, as Australia’s refineries have closed our refining capacity and capability has diminished and we’ve become more dependent on imports of already-refined fuel.

This could have consequences if global supply chains are severely disrupted.

The full article is here.

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