Petrol prices might be at 10-year lows but the poor quality of our petrol is blocking imports of super-efficient cars
THE car industry has repeated calls for better quality fuel to be introduced across Australia -- to enable the introduction of new super-efficient engine technology.
However, the petroleum industry says better quality fuel will lead to higher prices at the bowser.
Australian petrol prices are currently fourth-cheapest among OECD countries -- and sixth-cheapest for diesel -- according to figures compiled by the Australian Institute of Petroleum, largely because it’s not the same high standard as the fuels sold in other developed countries.
Australia’s regular unleaded is currently allowed to have up to 150 parts per million of sulphur and our premium unleaded is allowed to have to 50ppm.
World’s best practice for both unleaded fuels is 10ppm, a target already met by diesel fuel sold in Australia.
However, the petroleum industry is resisting pressure to invest in the more advanced refining process required to get unleaded petrol down to 10ppm.
Last year the petroleum lobby group tried to argue that the cost of cars would go up if Australia got better quality fuel.
However, it costs car companies more money to make changes to engines so they can run on Australia’s lower grade fuel -- because the engines are already calibrated for superior fuel to that sold locally
In May 2018, a UK-based vehicle emissions expert, Andrew Fulbrook, invited by the Australian car industry to speak at its annual general meeting and gala dinner in Canberra, said: “I can’t see an argument to say the vehicle would get more expensive if better quality fuel were to become available in Australia”.
He added: “The poor quality of Australian fuel in fact makes it more expensive to recalibrate (engines) to meet standards here”.
Already some car companies have dropped certain models or will no longer import selected variants because of the cost of the extra recalibration required -- which costs millions of dollars.
“The need for first-world quality fuel in Australia is more critical than ever,” said Tony Weber, the chief executive of the Federal Chamber of Automotive Industries, the car industry’s lobby group.
“Without quality fuel that is in line with other developed countries, the latest-technology, low-emission engines cannot be supported in the domestic market.”
Mr Weber said at a time where Australia and other countries are “grappling with challenges to meet Paris Climate Conference commitments, Australia cannot afford to fall behind the rest of the world in fuel quality”.
The FCAI claims a shift to better fuel would make most cars more efficient, not just the latest models.
“If you go to a higher quality fuel, the vast majority of vehicles on our roads automatically (become) more fuel efficient,” said Mr Weber. “There would be an improvement in the fuel economy of vehicles across the fleet of 17 million vehicles in Australia, not just the new ones”.
Mr Weber has also called for a review into how fuel excise is calculated because it disadvantages poorer people with older and less efficient cars.
Fuel excise is taxed at 41.2 cents per every litre sold -- indexed to inflation -- which means motorists with gas-guzzlers are paying more in tax revenue to the Federal Government than owners of economy cars.
“We need a more sophisticated debate about fuel excise,” said Mr Weber. “It currently has the perverse outcome that if you can only afford a 15 year old Commodore or Falcon, you pay more in excise than someone who owns a … brand new car. Poorer people typically live further out in the big cities, so they drive more, so the whole taxation regime (on petrol) is wrong.”
He added: “There needs to be a broader debate about the way in which we raise revenue (from motorists). As we move to (electric cars) in greater numbers the revenue from excise on petrol is going to drop anyway.”
The FCAI said it will continue its discussions with the Government and the Opposition about future fuel quality standards.
“A well-ordered transition to a realistic emissions target that suits our market is important to reflect the diversity of needs across metropolitan, rural and regional Australia,” said Mr Weber. “Our industry continues to support a mandated CO₂ emissions target that is relevant to Australian market conditions.”
This reporter is on Twitter: @JoshuaDowling