Tough travel and business restrictions have triggered a plunge in demand for oil and petroleum products.

Energy Minister Angus Taylor has offered the refineries $83.5 million of taxpayer cash.

The production payment will offer one cent per litre for jet fuel, petrol and diesel.

It is contingent on refineries keeping their doors open and agreeing to an "open book" policy with the government to continually assess their financial standings.

Mr Taylor said the refineries played an important role in ensuring Australia's fuel security.

He said agriculture, manufacturing and transport workers needed guaranteed access to petrol and diesel.

"The COVID-19 pandemic continues to place immense pressure on our refineries and the many Australians employed in the fuel sector," Mr Taylor said on Monday.

"We have worked closely with the sector to design and implement our comprehensive fuel security package."

Mr Taylor is continuing to work with the refineries to finalise longer term production payments, which are expected to be introduced in the middle of next year.

An aluminium smelter is also being offered $76.8 million worth of taxpayer cash to stay open beyond 2021.

Under the terms of the four-year deal, Alcoa will be required to dial down its Portland smelter if the Victorian power grid comes under pressure during summer heatwaves.

In exchange, the federal government will ensure it is paid for the load shedding.

Australian Associated Press