Columns of fire engulfed a crucial Australian oil refinery after a chain of explosions, authorities said on Thursday, as they warned of disruptions to domestic fuel supply.

Flames as high as 60 metres erupted late on Wednesday after a gas leak ignited at the Viva fuel plant in Victoria state, firefighters said, one of only two working oil refineries in Australia.

The refinery, about an hour’s drive southwest of state capital Melbourne, pumps out about 10 per cent of Australia’s fuel, according to energy company Viva.

Fire Rescue Victoria said on Thursday the blaze had been contained, although it could smoulder throughout the day.

“The whole sky was lit up with the bright flame,” Geelong resident Wayne Gardiner told AFP.

The refinery is capable of processing up to 120,000 barrels of oil each day, company figures stated.

Analysts said that, together with the Ampol refinery in Brisbane, it produces about 10-20 per cent of Australia’s total fuel supply.

“This is not a positive development,” Energy Minister Chris Bowen said as the nation’s fuel supplies are under pressure due to war in the Middle East.

Bowen said he had spoken to Viva and the firm was “very confident they can replace the petrol with imports”.

Prime Minister Anthony Albanese, currently visiting Malaysia, said Australia had secured an additional supply of some 100 million litres of diesel from Brunei and South Korea.

“This is the first of many expected shipments secured, under the government’s new strategic reserve powers,” he told a news conference.

The fire ripped through a section of the refinery responsible for the production of high-octane petrol, Bowen earlier said.

By triggering isolation valves, other parts of the plant producing jet fuel and diesel had been spared the worst of the blaze.

Geographically isolated and with only two oil refineries, Australia is heavily exposed to disruptions in global fuel supply and imports most of its petrol.

Canberra urged Australians to ignore the impulse to rush out and panic buy more fuel.

“It’s important that people buy as much fuel as they need. But no more, no less,” Bowen said.

‘Ferocious’

Incident controller Mark McGuinness said a “significant leak” of highly flammable gases and liquid hydrocarbons had triggered the inferno.

“It was quite ferocious. It went from a small fire through several explosions to a large, intense fire,” he told reporters.

Images taken on Thursday morning showed thick clouds of smoke billowing over the industrial complex.

Viva Energy boss Scott Wyatt said it was a “very challenging incident”.

“Production is not our primary priority today,” he told reporters. “Today it is getting the site safe.”

Australia holds roughly 38 days’ worth of petrol in reserve, according to government figures, far below the 90-day minimum dictated by the International Energy Agency.

While the government has so far resisted moves to ration fuel, it has urged drivers to conserve petrol where they can and to favour public transport if possible.

Like most nations in Asia and the South Pacific, Australia is heavily reliant on oil shipped through the Strait of Hormuz, which at one point carried one-fifth of the world’s oil and gas.

Shipping traffic through the vital waterway has essentially ceased since the United States and Israel launched strikes against Iran on February 28.