The blaze that erupted at the Viva Energy oil refinery on Wednesday night has reduced diesel and jet fuel output to 80 per cent of normal levels, and petrol to 60 per cent, with the repair timeline currently unknown.
David Leaney of the Australian National University said the company’s output, which supplies 50 per cent of Victoria’s fuel, would not be threatened.
“The key difference here is that Viva will be buying additional fuel on the international market and they’ll be importing that and that will cover the shortfall,” he said.
However, he said, Victorians could potentially see a price rise, as Viva’s international purchases would be spot prices rather than long-term contracts.
The spot price can be up to 8 cents a litre higher than the contract price, and Leaney said “potentially” this could be passed on at the pump.
“When would that happen? Fairly soon, as soon as those replacement contracts are in place,” Leaney said.
Any price increase could be expected to last at least a couple of weeks.
Earlier this morning, Viva chief executive Scott Wyatt said the costs imposed by the fire would be “absorbed” and not passed on to the consumer.
“Except for this fire, costs were actually trending down, and the number of petrol stations out of fuel were trending down – two really good trends,” Leaney told Today.
“With the exception of Victorian motorists over the next two to four weeks, I think we can see petrol prices fairly stable.”
He said another good sign was the government’s securing of additional fuel supplies, with Prime Minister Anthony Albanese touting the success of bringing in 100 million litres from overseas.
That amount of fuel is, however, typically what Australia consumes in just 1.3 days – but Leaney said the bigger picture was showing improvement, with fuel reserves trending up from 32 days at the beginning of the crisis, to close to 40 now.
“These are good trends and it is important that we’ve got those supplies shored up,” he said.
NEVER MISS A STORY: Get your breaking news and exclusive stories first by following us across all platforms.