Sunita SomvanshiWhen you fill a tank at a petrol station in Australia, the fuel has almost certainly been refined overseas and shipped in. Not processed at a domestic facility down the road. A joint warning issued this week by Viva Energy and unions to Prime Minister Anthony Albanese is direct about what that means: Australia is, in their words, “dangerously unprepared” for a fuel supply crisis.
The warning comes after a year in which Middle East energy disruptions raised the cost of imported fuel for Australians. Higher fuel prices have added a reported average of approximately $550 per year per person to household costs, according to figures cited in the warning — though the methodology and exact timing of that calculation have not been independently confirmed. At a time when inflation is already compressing household budgets and the Reserve Bank is facing uncertain rate territory ahead of a federal election, that figure lands with force regardless of the precise methodology behind it.
The core problem is structural. Australia once had a domestic refining industry of some scale. It does not anymore. The last major domestic refineries closed or were converted to import terminals over the past decade, driven by economics: it was cheaper to import refined fuel than to process crude oil in facilities that required continuous capital investment. The logic was sound in a stable global energy market. It looks different when one disruption — a conflict, a shipping bottleneck, a weather event — sits between Australia and its next fuel delivery.
What a real supply disruption would look like
In a disruption scenario, Australia’s fuel reserves — the government maintains strategic stocks, but at levels critics have described as insufficient for an extended supply shock — would be drawn down quickly. Freight, logistics, agriculture, and emergency services all depend on diesel in particular. A petrol shortage is inconvenient; a diesel shortage is an economic emergency within days.
Viva Energy is Australia’s largest downstream fuel company and operates the country’s only remaining oil refinery, at Geelong in Victoria. The company’s decision to co-sign this warning with unions — an unusual alliance — adds weight to the message. Both parties are saying that political will to invest in domestic fuel security has not matched the rhetoric about supply-chain resilience.
The timing is not accidental. Australia goes to a federal election in the coming months, and fuel prices are a live political issue. The government has focused on energy transition and EV rollout, which are longer-term answers to energy dependence. The unions and Viva Energy are asking a narrower question: what is the plan for the next five years, when the country still runs primarily on petrol and diesel and the supply chain for those fuels remains concentrated offshore?
Middle East disruptions this year have been a live demonstration of the problem, with regional instability keeping shipping costs elevated (https://www.karmactive.com/israel-election-2026-exit-polls-coalition-math/). European countries dealing with their own energy and fiscal pressures have similarly had to reckon with import dependence (https://www.karmactive.com/france-bond-yields-protests-limoges-fire-2026/). Australia is not unique in having this vulnerability; it is unusual in having done relatively little to address it while being so geographically exposed.
The government has pointed to International Energy Agency agreements that require member countries to hold a minimum number of days of fuel reserves. Critics argue Australia’s IEA compliance depends partly on counting commercially held stocks that would not necessarily be available in a genuine supply emergency.
The joint warning is not a call for nationalisation or a return to 1980s refining economics. It is a demand for a funded strategic fuel reserve policy and a clear plan that treats domestic refining and storage capacity as a national security asset. Whether the government acts before the election — or whether this becomes one of many pre-election pressure campaigns that fades after polling day — is the question. Extreme weather events disrupting supply chains and infrastructure elsewhere offer a recent illustration of how quickly critical supply lines can be severed (https://www.karmactive.com/cyclone-arnab-andhra-pradesh-trains-cancelled-dead/). For ordinary Australians, the near-term effect is already visible at the bowser. The longer-term risk, if the structural problem is not addressed, is a supply shock arriving before policy does.
