Australia's fuel security sparks questions

The federal government has played down the national security risk of Australia's limited fuel supply.

In parliament on Tuesday, independent MP Bob Katter queried whether the nation had adequate fuel reserves to counter disruption caused by terrorism or armed conflict.

Home Affairs Minister Peter Dutton said the risk of espionage, sabotage or coercive influence in Australia's domestic liquid fuel refinement component of the supply chain had been assessed as relatively low.

Energy Minister Josh Frydenberg, who announced a review of fuel security earlier in the week, noted Australia imported 75 per cent of its crude oil and more than 55 per cent of its refined product.

The review will look at how fuel is supplied and used in Australia, including national resilience to withstand disruption stemming from a reliance on imports.

"The fact of the matter is that Australia's liquid fuels - which is petrol, which is diesel, which is jet fuel - are extremely important," Mr Frydenberg said.

"We're increasing our reliance on imports because over the last decade three out of our seven refineries have closed and our domestic oil production has decreased by a third."