Key facts
- Australia is considering building its first new oil refinery in 60 years in Western Australia.
- A $4 million feasibility study will be funded by the Commonwealth and WA governments.
- Australia imports approximately 90% of its liquid fuels.
- Treasurer Jim Chalmers warned of substantial inflation threats due to the Middle East conflict.
- The proposed refinery project would be undertaken by Perdaman.
Australia is considering the construction of its first new oil refinery in six decades in Western Australia as part of a strategy to mitigate future global oil supply shocks. The federal and Western Australian governments will jointly fund a $4 million early-stage feasibility study into the project. This initiative comes amid heightened concerns over global inflation, with Treasurer Jim Chalmers warning that the recent escalation of the Middle East conflict poses a significant threat. Treasury officials have indicated that the oil market is now more vulnerable to supply disruptions, potentially keeping prices high. The proposed refinery, which would be built by Perdaman, aims to address Australia's current reliance on imports for approximately 90% of its liquid fuels, a vulnerability highlighted by recent international oil market volatility. While the project could cost billions and may require ongoing government support, it is seen by the government as a prudent step towards energy security. However, environmental groups have voiced criticism, arguing that the focus on fossil fuels misses an opportunity to reduce reliance on them.