A top Iraqi security official, however, said the government still held the facility.
The fighting at Beiji, some 250 kilometers north of Baghdad, comes as Iraq has asked the US to launch airstrikes targeting militants from the Islamic State of Iraq and the Levant.
While US President Barack Obama has not fully ruled out the possibility of launching airstrikes, such action is not imminent, officials said, in part because intelligence agencies have been unable to identify clear targets on the ground.
The Iraqi security official said the government force protecting the refinery was still inside today and that they were in regular contact with Baghdad.
The refinery's workers had been evacuated to nearby villages, he said.
Helicopter gunships flew over the facility to stop any militant advance, the official said.
The insurgent took over a building just outside the refinery and were using it to fire at the government force, he said.
Any lengthy outage at Beiji risks long lines at the gas pump and electricity shortages, adding to the chaos already facing Iraq.
The campaign by the al-Qaida-inspired Islamic State militants has raised the specter of the sectarian warfare that nearly tore the country apart in 2006 and 2007, with the popular mobilisation to fight the insurgents taking an increasingly sectarian slant, particularly after Iraq's top Shiite cleric made a call to arms on Friday.
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