Ousting IS fighters from around the refinery would mark another significant achievement for Baghdad, a day after pro-government forces retook the nearby town of Baiji.
"Iraqi forces... Reached the gate of the refinery," the governor of Salaheddin province, Raad al-Juburi, told AFP.
Three officers confirmed that Iraqi forces had reached the refinery, 200 kilometres (120 miles) north of Baghdad, where security forces have been encircled and under repeated attack since June.
Fully clearing the Baiji area of jihadist fighters would further boost Baghdad's momentum and cap a week which also saw pro-government forces retake a major dam.
A joint operation by the army and Shiite militia earlier this week wrested back the Adhaim Dam in the eastern province of Diyala.
A breakthrough preliminary deal reached on Thursday between the federal government and the autonomous Kurdish region on long-standing budget and oil disputes also raised the prospect of increased coordination in the fight against IS.
The IS group has had most of the initiative, both on the ground and in the propaganda war, in recent months.
But the man said to be Baghdadi seemed at pains to reassure his followers and the lack of video failed to dispel speculation he might still have been wounded.
America's top military officer, General Martin Dempsey, arrived in Iraq for talks on the the further expansion of military operations against the jihadists.
A US-led coalition is carrying out air strikes against IS jihadists in both Iraq and Syria, while Washington has announced plans to increase the number of its military personnel in the country to up to 3,100.
The US and other governments have pledged trainers and advisers to aid Iraqi security forces in their battle against IS.
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