Australia has secured an extra 100 million litres of diesel to help alleviate supply pressures, as a blaze at an oil refinery caused a “setback” to local fuel production.

A “ferocious” fire burned for 12 hours at Viva Energy’s refinery in Geelong and was finally extinguished around midday Thursday.

Energy Minister Chris Bowen said the fire was “not good timing” and could impact Australia’s fuel production “for some time”.

The refinery is one of only two remaining in Australia and supplies 10 per cent of the nation’s petrol and half of Victoria’s.

Disruptions to petrol production are expected, while production of other fuels is expected to slow in the immediate term.

Separately, Prime Minister Anthony Albanese revealed that two ships, each carrying 50 million litres of diesel, would be heading to Australia.

One shipment was from Brunei and one was from South Korea.

The diesel would be directed “where it is needed most”, including to farmers and regional areas.

The shipments are the first secured under the government’s new Strategic Reserve powers, in a partnership with Viva Energy.

Albanese said the oil refinery fire was “very distressing”.

However, Bowen insisted production at the site would not come to a grinding halt.

“At this point, production of diesel and jet fuel continues and (there is) no reason to believe at this point that it will stop that,” he told the ABC on Thursday morning.

“I’m sure that petrol production will continue, but it may be impacted for some time.”

Australia obtains most of its refined fuel from Asian countries, including Singapore, South Korea, India, Malaysia and China.

The likely cause of the inferno was equipment failure, authorities have revealed, however investigators will conduct a probe.

“It looks like a valve has given way and has started a small leak,” Fire Rescue Victoria deputy commissioner Michelle Cowling told the ABC.

“(It) obviously found an ignition source and ignited into a significant explosion.

The fire was brought under control but continued to pose significant risks and may burn for hours more, Cowling said shortly after 11am.

It broke out at units responsible for the production of petrol, speciality regional products and aviation gasoline, which is distinct from jet fuel.

Viva Energy Australia’s chief executive Scott Wyatt said petrol production had been disrupted, but imports would be sufficient to cover any shortfalls.

“We’ll only start increasing production again once we’re confident we can do that safely,” Wyatt said.

“To the extent we have shortfalls in production, just cover that with our import program, which is quite full for the next… couple of months.”

The Victorian government has been assured there is no immediate impact on fuel supply, state Energy Minister Lily D’Ambrosio said.

“There’s no cause for alarm,” she told ABC Radio.

“From indications thus far from Viva … they have in hand those additional shipments.”

Petrol is far easier to import through the global market than diesel or jet fuel, she added.

The refinery can process more than 120,000 barrels of oil per day, manufacturing petrol, diesel, jet fuel, LPG, avgas and low aromatic fuel.

Australia had eight operating oil refineries in 2005.

But the Geelong plant is one of only two facilities remaining. The other is Ampol’s Lytton Oil Refinery in Brisbane.

Both have been under the spotlight in recent weeks amid fuel security challenges related to conflict in the Middle East.

Opposition Leader Angus Taylor said the fire would have a direct impact on the country’s fuel supply.

“It was a horrific scenes we’ve seen today of the fire down at Geelong,” he told reporters at the Gold Coast on Thursday.

“I’m glad to hear that as far as I know, at least there’s been no safety issues there, but clearly there will be an impact on our fuel supply.”

About 50 firefighters, ten fire trucks and a boat attended the scene, Fire Rescue Victoria assistant chief fire officer Michael McGuinness told reporters.

“(It was) quite ferocious. The fire went from a small fire through several explosions to be quite a large, intense fire,” McGuinness said.

There are no reported injuries and all employees and emergency responders have been accounted for.

-with AAP