Oil Refineries Australia 2025: Impact on Fuel Prices, Jobs & Energy Security

Australia’s oil refinery sector has been under the spotlight for years, but 2025 marks a critical juncture. With global decarbonisation, volatile oil prices, and new government policies, understanding the role and future of oil refineries is essential for every Australian. Whether you fill up your car weekly, work in heavy industry, or just want to know how energy trends affect your budget, here’s what you need to know about oil refineries in Australia in 2025.

Australia’s Oil Refinery Landscape: 2025 Snapshot

Once home to eight major oil refineries, Australia’s landscape has shifted dramatically. As of 2025, just two major refineries remain in operation: Viva Energy’s Geelong refinery (VIC) and Ampol’s Lytton refinery (QLD). This contraction reflects both economic headwinds and a global move toward cleaner energy sources.

• Geelong Refinery (Viva Energy): Processes ~120,000 barrels/day, with recent upgrades to produce low-sulphur petrol in line with 2025 fuel quality standards.
• Lytton Refinery (Ampol): Processes ~110,000 barrels/day, focusing on diesel and jet fuel alongside petrol.

Both refineries have received significant government support since 2021, including the Federal Fuel Security Package, which continues in 2025, offering production payments and capital grants to ensure local refining remains viable.

Policy Shifts and the Push for Energy Security

The COVID-19 pandemic and global supply disruptions brought energy security to the fore. In response, the Australian Government extended and expanded its Fuel Security Service Payment (FSSP) program in the 2024-25 budget, providing up to $0.01/litre for domestically refined fuel. This policy aims to ensure that, even as the world pivots away from fossil fuels, Australia maintains a strategic reserve of refined products for emergencies.

Key 2025 policy updates include:

• Stricter fuel quality standards: Sulphur limits in petrol have been slashed, requiring new investments in refining technology.
• Mandatory minimum stockholding obligations: Fuel importers and refiners must hold enough stock for 24 days of consumption, up from 20 days in 2023.
• Support for transition: Grants for refineries investing in renewable fuels (e.g., co-processing biodiesel, hydrogen-blending trials).

These measures aim to balance the need for cleaner fuels with the economic and strategic importance of domestic refining.

Impacts for Australians: Prices, Jobs, and Transition

For consumers, the fate of oil refineries directly affects petrol and diesel prices. With local refining capacity shrinking, Australia now imports over 70% of its refined fuel. This exposes motorists and businesses to swings in global shipping costs and geopolitical risks (such as tensions in the Red Sea in early 2025).

• Fuel prices: In 2025, average unleaded petrol prices hover around $2.05/L, with periodic spikes during global supply shocks. Local refining softens the blow but can’t fully insulate Australia from international markets.
• Jobs: The two operating refineries directly employ around 1,600 workers, with thousands more in supporting roles. Policy support has slowed job losses, but the long-term outlook remains uncertain as renewables ramp up.
• Transition challenges: Both Geelong and Lytton are piloting biofuel and hydrogen projects, aiming to secure a role in Australia’s low-carbon future. However, large-scale transition is complex and capital-intensive.

Meanwhile, the government’s 2025 National Energy Transition Roadmap signals increasing investment in electric vehicle infrastructure and alternative fuels, suggesting the role of oil refineries will continue to evolve over the next decade.

What to Watch: The Road Ahead for Oil Refining in Australia

As Australia looks to 2030 and beyond, oil refineries remain both a symbol of the old economy and a potential bridge to the new. Ongoing policy support, technological upgrades, and adaptation to cleaner fuels will be crucial. For now, local refineries offer a buffer against global shocks, but the momentum is clearly toward a more diversified, low-carbon fuel mix.