Western Australia lost its last major oil processing capacity with the 2021 closure of the Kwinana facility, underscoring the regional motive to diversify and secure fuel resilience.

Australia is weighing its first new large-scale oil refinery in more than six decades, a project led by Perdaman in Western Australia, following a joint pre-feasibility and pre-front-end engineering design funded by federal and state governments.

A$4 million has been allocated by the Australian government and Western Australia to fund the initial feasibility study and related planning for the refinery.

The push is framed as strengthening national energy security amid geopolitical volatility in global oil markets, with tensions in the Middle East cited as a driver.

The broader regional context includes Perdaman’s other projects and local concerns over heritage, indigenous rights, and UNESCO-related matters around Murujuga.

Environmentalists have raised concerns about expanding refinery capacity, arguing that reducing fossil fuel dependence should take precedence over new refining capacity.

Senior officials, including the prime minister and the WA premier, warn of inflation risks from Middle East conflicts and seek measures to shield Australia’s economy.

The government is considering extending the fuel excise temporarily, though no extension has been confirmed, while exploring measures to cushion households from higher fuel costs.

Australia currently relies on imports for the vast majority of its liquid fuels due to refinery closures, with only a couple of refineries remaining operational, prompting efforts to bolster domestic energy security.

The refinery plan sits within a broader A$15 billion package aimed at safeguarding Australia’s fuel supply amid global market disruptions tied to Middle East dynamics.

Critics question the energy-security benefits and highlight environmental and cultural impacts around Murujuga, including World Heritage concerns linked to Perdaman’s projects.

Officials defend the project as a path to sovereign capability and stability, while acknowledging public anxiety over fuel security.