A major fire at one of Australia's two oil refineries has been extinguished, but the damage has deepened fears over the nation's petrol supplies amid a global fuel crunch.

Emergency crews rushed to Viva's Corio oil refinery in Geelong, southwest of Melbourne, just before midnight on Wednesday, after reports of explosions and flames.

The blaze was put out on Thursday after burning for 13 hours. No one was injured, with dozens of workers on site when it broke out evacuated safely.

The refinery - which produces 50% of Victoria's fuel and 10% of the nation's - is still partially operational but the government has warned of impacts to petrol production.

Energy Minister Chris Bowen said the fire was not great timing with Australia's fuel supplies under pressure since war broke out in Iran, creating a global oil crisis.

The price of diesel in Australia has doubled in recent weeks, with fuel stations reporting shortages amid reports of panic buying, while airlines are cutting back some services as jet fuel costs rise.

Bowen added, 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, further noting that he is working closely with the company.

The cause of the fire was due to equipment failure, as reported by Fire Rescue Victoria, which stated that there will be an investigation.

The Corio refinery processes about 120,000 barrels of oil per day and employs over 1,100 people.

Viva Energy chief executive Scott Wyatt explained that the fire had affected two petrol production units, although others remain undamaged. Jet fuel and diesel production are also being made at reduced levels as a safety precaution, and production will only increase when it is safe to do so.

Experts maintain that despite the incident, Australia’s diverse supply chain for refined fuels should mitigate immediate supply concerns, mostly relying on imports from Singapore, South Korea, and Malaysia. However, the reduced local production limits the buffer for shocks.

Geelong Mayor Stretch Kontelj called the fire unprecedented and noted its significant impact on the community and refinery operations.