The Tasmania Fire Service issued an emergency bushfire warning for the West Coast town of Tullah.
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Around 5.30pm on Saturday, TFS issued a watch and act warning for the township, before it was upgraded to an emergency warning around two hours later.
By Sunday morning, the threat had reduced and the emergency warning had been officially downgraded to the "advice" level, meaning the fire was still burning, but there was no longer immediate danger for the township.
Residents were urged to stay up to date in case the situation changed.
However, a watch and act warning remained in place around Mackintosh Dam Road.
With approximately 163 residents, Tullah is a small town located on the northern part of the West Coast Range.
On Saturday evening, TFS warned that the bushfire travelling North East towards Tullah was out of control and the town was considered high-risk.
Residents were told to evacuate, with a safe place opened at Tullah Sports Hall.
It comes during a period of fire restrictions for the state, with permits required for the burning of vegetation.
Fire permits are generally required from November to March, as the higher temperatures increase the risk of bushfires.
In December 2021, the TFS said it was bracing for a potentially risk bushfire season.
At the time, Chief Officer Barry said the incoming bushfire season was fraught with danger after above average rainfalls in October and November led to "significant grassland growth".
"We've had a lot of rain and that generally tends to get us a lot of grass growing as well ... Those fine fuels (dried grass) can dry very quickly and burn very quickly in this kind of weather," he said.
With the emergency from TFS, Tullah residents were instructed to evacuate if unable to defend their home.
Those without a bushfire action plan were told to evacuate to a safer location.
For those who are planning to evacuate, TFS suggested avoiding evacuation centers if possible, to reduce the risk of COVID-19.
"The best option is to stay with family or friends," TFS spokesperson said.
"There may be a higher risk of person-to-person transmission of COVID-19 in an evacuation centre, not only to those seeking shelter but also to emergency services and evacuation centre personnel.
"Physical distancing is to be maintained at all times in evacuation centres."
Other members of the community are asked to avoid the area.
TFS warned that people at higher risk from the effects of smoke, including those with medical conditions are advised to have a personal plan for managing their health in the event of a bushfire.
Additional advice is available on the Department of Health website and and the Asthma Australia website.
Meanwhile, a vegetation fire at Waterhouse is continuing to burn, but is not considered a threat to the community.
For fire updates, listen to ABC Local Radio or visit the TFS website at fire.tas.gov.au.
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