'Significant' out-of-control fire at major oil refinery

Petrol production has been affected as firefighters continue to battle a significant, out-of-control fire at one of Australia's two oil refineries.

Crews were dispatched to the site in Corio, about 60km southwest of Melbourne, shortly after 11pm on Wednesday following reports of explosions and flames.

The Viva Energy Geelong refinery supplies more than 50 per cent of Victoria's fuel and 10 per cent nationwide, according to Viva's website, and the fire comes during a global fuel crisis.

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

The blaze is not yet under control but is currently contained to the plant where it broke out, Fire Rescue Victoria said.

It began in part of the facility where motor gasoline is produced, according to FRV's chief fire officer, Michael McGuinness.

"There's been some sort of leak, there's hydrocarbons, flammable liquids which very readily caught fire," he said on ABC.

"It was burning in an area of approximately 30 metres by 30 metres. There have been several small explosions."

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

Viva Energy has told authorities there is no immediate impact on fuel supplies.

However, Energy Minister Chris Bowen said petrol production has been affected, while jet fuel and diesel production are at reduced levels. "At this point, the impact is mainly on petrol production, but obviously this is very early days," Mr Bowen told Nine's Today program on Thursday.The extent of the damage is not yet clear, he added."The fire's not yet under control, so there's still some way to go."This is not a positive development, but obviously there's a long way to go in terms of working out just what the impact is."

Along with the Lytton Oil Refinery in Brisbane, the Geelong plant is one of two facilities capable of refining fuel domestically.

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

A watch and act alert for residents of Corio, Norlane and North Shore was downgraded to advice level about 5.30am.

Locals are advised to go about their normal activities but expect possible smoke, emergency services and traffic disruptions in the area.

FRV specialists are undertaking atmospheric monitoring and Victoria Police, Ambulance Victoria, EPA and Worksafe are at the scene.

Investigations into the cause of the fire will take place, a Victoria Police spokesperson said.

"People in the surrounding areas are being advised to keep their windows closed due to the large amount of smoke," they added.

Viva declined to comment.