Shares of Viva Energy Group Ltd (ASX:VEA) fell sharply on Monday following a fire last week that disrupted operations at its Geelong refinery in Corio, Victoria. The stock slid more than 6% to a one-month low of A$2.290 after trading resumed; the company had halted its shares for two days in the aftermath of the incident.
Viva Energy said the blaze occurred within the refinery's gasoline complex, while other units - including crude distillation - were not affected. The company reported the fire was contained and fully extinguished by Thursday morning.
In its operational update, Viva said short-term output at Geelong would be reduced: diesel and jet fuel production are expected to run at about 80% of capacity, while petrol production will be at roughly 60% of capacity. The firm also stated it has sufficient fuel stocks to cover the reduction in output and to maintain normal fuel supply to customers during the recovery period.
Viva signaled an intention to raise production levels as repairs progress. The company expects to be able to lift diesel, jet fuel, and petrol production to above 90% of capacity over the coming weeks. A formal review of the damage, repair requirements, and the financial impact from the fire is due to start this week.
Geelong is one of only two fuel refineries remaining in Australia, and its operational status carries national significance. The site has the capacity to process up to 120,000 barrels of oil per day. It supplies about half of Victoria's fuel and roughly 10% of Australia’s total fuel consumption, underlining the refinery's role in regional and national fuel markets.
The disruption comes at a time when concerns over fuel shortages have been heightened by the war in the Middle East, a dynamic that has already pressured oil and fuel markets. Viva said refining margins at Geelong rose sharply amid increased fuel supply disruptions, a factor that pushed up oil and fuel prices.
Viva also addressed crude sourcing for Geelong, noting the refinery does not typically rely on Middle Eastern crude. The company said most of its crude comes from North and South America, Southeast Asia, and Australia. Viva added that Geelong has firm crude supply through to July and expressed "high confidence" that supply will continue.
On group volumes, Viva said total sales rose 5.1% year-on-year to 4,302 megalitres of fuel. The company did not provide additional new forecasts for the wider group's financials in the immediate statement but indicated it would assess the financial consequences as part of the damage and repair review.
The combination of an immediate drop in refinery output, a halt in trading, and broader market sensitivity to Middle East-related supply disruptions contributed to downward pressure on Viva's shares. The firm’s operational stance - maintaining customer supply from stock while working to restore plant output - frames the near-term picture for both markets and downstream fuel consumers.
Investors and market participants will be watching the results of Viva's upcoming review for more concrete estimates of repair timelines and the fire's financial cost, as well as any subsequent updates on crude supply visibility beyond the firm arrangements in place through July.