![\"\u2018Timing](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/04\/2e36e722ba3459e296dc72b41c4a6327.jpeg\")
<\/p>\nBuilding new fuel refineries in Australia is \u201chard to justify\u201d commercially as high costs and long construction times make the investment \u201cvery difficult\u201d, an energy CEO has warned.<\/p>\n
Calls for Australia to build more refineries grew after the oil crisis erupted and a fire swept through Viva Energy\u2019s Geelong refinery 10 days ago.<\/p>\n
Australia has just two oil refineries, down from seven it had in 2013 as major oil and gas companies shut their domestic operations.<\/p>\n
Building new refineries in Australia would be challenging and not cost-effective considering oil\u2019s roll-off, Viva Energy\u2019s CEO Scott Wyatt told Business Weekend.<\/p>\n
\u201cTo build a new refinery in Australia \u2026 it’s an enormous amount of money,\u201d Mr Wyatt said.<\/p>\n
\u201cThese modern refineries are significantly larger than what we operate.<\/p>\n
\u201cThey’re very expensive to build, take five to ten years to actually construct and then you probably need 20 years to get a payback.\u201d<\/p>\n
He said the construction of refineries was far less common because energy users are looking away from oil.<\/p>\n
\u201cIf you fast forward 10 years to when a new refinery would be in operation and think about the next 20 years after that, we would have reached peak oil demand at that point,\u201d Mr Wyatt said.<\/p>\n
\u201cWe’re into a decline in demand for hydrocarbons.<\/p>\n
\u201cSince you’re running a very expensive refinery into a market that is in decline, they’re hard to justify on a pure commercial basis.\u201d<\/p>\n
He suggested that expanding the capacity of existing refineries would be a more cost-effective way to ensure Australia can better meet its fuel security needs.<\/p>\n
<\/p>\n
\u201cThat’s a more sensible proposition because a lot of the capital that’s needed to support processing is already there so that might be a different way of thinking about improving Australia’s refining capability,\u201d Mr Wyatt said.<\/p>\n
\u201cBut building new I think is very difficult.\u201d<\/p>\n
The Albanese government was reportedly in discussions with energy companies about a new refinery in early April.<\/p>\n
A new refinery could cost between $8b and $10b, but sources told The Australian<\/a> that Labor was open to an investment in this space.<\/p>\n More than 70 per cent of Australians support the development of new fuel refineries, according to an SECNewgate survey.<\/p>\n