Australia's most popular type of petrol - unleaded - could be phased out within two years

[Express]

Australia's most popular type of petrol - unleaded - could be phased out within two years


Matthew Knott
Bevan Shields
21 December, 2016


Regular unleaded petrol - the most popular fuel choice among Australian motorists - would be completely phased out under a series of radical proposals by the Turnbull government.

Banning regular unleaded petrol would dramatically improve the quality of Australian fuel, rated the dirtiest in the developed world, but would likely lead to substantial price hikes for motorists.

See link below for video

Premium unleaded petrol costs an average of 10.7 cents more per litre than regular unleaded, which has been the standard fuel for Australian vehicles since leaded petrol was phased out by the Howard government.

The operators of Australia's four remaining oil refineries - two in Victoria, one in Queensland and one in Western Australia - would also be forced to rebuild their plants, with costs potentially running into the billions.



Regular unleaded petrol is the most popular type of fuel in Australia. Photo: Chris Ratcliffe


A government discussion paper quietly released on Tuesday afternoon (see related article below) argues that reducing the amount of sulfur in the petrol sold in Australia would produce strong environmental and health impacts. Australia has the lowest quality petrol of the 35 countries in the OECD, below Mexico, Turkey and Estonia.

The paper proposes five options, including:

•Phasing out regular unleaded petrol over two to five years, with sulfur in premium unleaded and ethanol blends limited to 10 parts per million (down from 50ppm);
•Bringing Australian standards into line with Europe, with a 10 ppm sulfur limit for all fuels including regular unleaded (down from 150ppm);
•Limiting sulfur in regular unleaded petrol limited to 50ppm from 2020 and 25ppm for premium unleaded; and
•Business as usual

NRMA spokesman Peter Khoury said the association supported improving Australian fuel standards but was growing "increasingly concerned" about the ideas suggested by the government.



The Altona refinery in Melbourne would be affected by changes to fuel standards. Photo: Luis Ascui


"If you go down the path of phasing out regular unleaded you would be exposing motorists to even more rorts than we are now," he said.

"Premium unleaded already costs 21 cents more than ethanol - imagine what could happen if we adopt European standards."

The Australian Automobile Association said in a submission to government that reducing the availability of regular unleaded petrol would have "significant cost implications for the vast majority of motorists".

"This would be particularly bad for those that drive older vehicles, who would be forced to pay a higher price for fuel, without any emissions benefits being realised."

Regular unleaded petrol is used by around 80 per cent of motorists in the states and territories outside NSW. In NSW, which has an ethanol mandate, regular unleaded is used by around 22 per cent of motorists, premium unleaded 30 per cent, ethanol 18 per cent and diesel 30 per cent.

The paper acknowledges the the impact on "different socio-economic groups" of phasing out regular unleaded will have to be carefully analysed. It says particular attention will also have to be given to the impact on regional communities and domestic refineries.

The Australian Institute of Petroleum has warned the introduction of European standards here would threaten the viability of the refineries, three of which have already closed in the last five years.

"Given the potential impact on Australian oil refineries we're seeking a careful and thorough consideration of costs and benefits of change, particularly to refineries and Australian motorists," chief executive Paul Barrett told Fairfax Media.

The closure of the Vitol-operated refinery in Geelong would have major economic ramifications for the Victorian industrial city.

An AIP submission to the government's fuel review said the industry would need at least five years to implement any significant changes.

"If the implementation of the 10ppm sulfur petrol leads to refinery closures, it will also place a significant volume demand on the import market in Asia providing upward pressure on the price of new Australian grade fuel specifications," the submission warns.

When releasing the discussion paper on Tuesday, Environment Minister Josh Frydenberg and Infrastructure Minister Paul Fletcher said the proposals, open for consultation until March, were "designed to keep Australia in line with international vehicle markets and keep us enjoying some of the cleanest air in the world".

Melbourne motorist Alison Lansley said she would struggle to afford the switch to premium unleaded for the family's 16-year-old Toyota. "I guess if they mandated it, we wouldn't have much of a choice. But if it's better for the environment, that's okay," the Carlton resident said.

But Patrick O'Neill was angered by the proposal. "It would **** me off that I have to pay more for something I didn't want," the Albury father of two said. "I can afford it, but my kids can't, so that's not fair."

- with Alexandra Laskie


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http://www.smh.com.au/federal-politi...21-gtft1v.html

Government fuel crackdown could save motorists $519 a year but increase cost of new vehicles


James Massola
21 December, 2016


New cars could cost up to $2000 more under new environmental standards being considered by the Turnbull government, but motorists could save more than $500 a year on their petrol bills.

The proposed new fuel efficiency standards - which would require manufacturers to sell cars, trucks and buses with more efficient engines - would also help Australia meet its Paris climate-change commitments by keeping some 65 million tonnes of pollution out of the atmosphere.

See link below for video

Two other measures - upgrading existing air pollution standards and improving the quality of fuel sold at the bowser - are also being considered.

However, the trio of proposals quietly released on Tuesday afternoon has alarmed motoring group the Australian Automobile Association (AAA), which warned of a hit to household budgets because new standards for cars and fuel could drive up the cost of fuel and cars - an argument the government's own draft regulatory impact statement concedes.



Petrol bills could fall but the cost of new cars could climb under any tightening of Australia's fuel standards. Photo: Louis Douvis


Climate change is a politically sensitive topic for the Turnbull government, which earlier this month beat a hasty retreat after initially announcing a review of its climate policy would examine a form of carbon pricing on the electricity industry.

Environment Minister Josh Frydenberg and Urban Infrastructure Minister Paul Fletcher announced they were seeking feedback about the proposed efficiency measures after inquiries from Fairfax Media on Tuesday.

In a joint statement, the pair said the proposals are "designed to keep Australia in line with international vehicle markets – and keep us enjoying some of the cleanest air in the world".

"By requiring global automotive manufacturers to supply vehicles in Australia with more fuel-efficient engines – as they are now doing in many other countries – these new standards could cut consumer fuel spending by up to $28 billion by 2040."



The Australian Institute of Petroleum has warned higher quality could threaten the economic viability of Australian refineries. Photo: Jessica Shapiro


"This translates into annual fuel savings for the average owner of a passenger car and light commercial vehicle of up to $519 and $666 respectively."

Upgrading the quality of Australia's fuel, and mandating a reduction in the amount of sulphur in it, is potentially problematic for Australia's four remaining refineries because it could force them to upgrade ageing infrastructure and pass the cost on to consumers.

The draft impact statement notes that the Australian Institute of Petroleum has warned higher quality could "threaten the economic viability of Australian refineries".

However, the ministers noted current fuel standards expire in 2019 and "we need to be ready with new standards to ensure Australians can have access to the right fuel for the latest vehicle technology".

The claimed saving of between $237 to $519 a year in petrol costs assumes, in 2025, an average motorist in an average car purchasing petrol at a retail price of $1.30 a litre. The highest potential saving is based on Australia adopting the same fuel standard targets as Europe.

But the study models a price increase for an average performing passenger vehicle in 2025 of between $827 and $1922 - assuming manufacturers pass the full cost on to consumers.

It would take a motorist about four years to recoup the extra cost of a new car through fuel savings, according to the study - or an average of about 57,000 to 62,000 kilometres of driving.

AAA chief executive Michael Bradley questioned the government's claimed savings "in the absence of either real-world emissions testing, or a decision on future fuel standards and prices".

"The AAA encourages the government to credibly identify all of the costs and benefits associated with these proposed changes, as motorists deserve a clear explanation of how any fuel and car price increases will affect household budgets," he said.

Australia currently has a much lower quality of fuel compared to Europe and the United States.

In the year to December 2015, transport accounted for 17 per cent of greenhouse gas emissions in Australia, with light vehicles accounting for 10 per cent of that. Under current policy settings, transport emissions are projected to rise to 20 per cent by 2029-2030.

A discussion paper released by the government on Tuesday noted fuel consumption by Australian passenger vehicles increased by 460 million litres between 2010 and 2014 and automotive fuel was significant source of noxious emissions.

"Unless further action is taken to improve the management of vehicle emissions, air quality is likely to decline in the medium to long term. This will adversely impact on the health of Australians," the paper said.

Correction: An earlier version of this story reported that new cars could cost $2000 a year more under the new environmental standards being considered. In fact, it would be a one-off cost.

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