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Will Motorists Really Benefit from the Government's Proposed Fuel Changes

Late last year, shortly before Christmas, the Federal Government released three draft proposals that seek to improve the fuel efficiency of Australian vehicles. As part of the proposed measures designed to make our vehicles cleaner, an overhaul in standards would seek to align local regulations with those found in Europe. Currently, Australia is ranked last among 35 OECD (Organisation for Economic Cooperation and Development) nations for petrol quality.

While being touted as a move that could eliminate 65 million tonnes of greenhouse gas emissions before 2030, and also potentially affording motorists’ savings upwards of $500 per year in fuel costs, not everyone is cheering the news.

The outcry isn’t so much concerned with the idea of reducing our environmental footprint, but more towards one of the radical overhauls proposed to achieve it. Said proposal involves removing regular unleaded fuel from sale across the country, while also decreasing sulphur limits for premium unleaded and ethanol fuels. The other two measures focus purely on sulphur reduction.

Even with headline savings for motorists being touted by the government, it is likely to have a harder time convincing motorists about such savings. This is primarily due to the fact that there is an inherent price gap between regular unleaded fuel, and the next highest grade of fuel – premium unleaded (95).

Advocates will suggest that higher grades have a greater driving range that actually make them cheaper to fill per tank. They’ll also note the record number of new car sales, suggesting more and more motorists are converting to vehicles that ‘benefit’ from premium fuels – even though this goes against the fact that some would clearly be disadvantaged by the move. However, as the AAA point out, recent research into fuel emissions has suggested a stark difference in real-world performance compared with laboratory condition.

One must also consider that many motorists have a hard time justifying a greater expense at the point of purchase. Analysis should also consider the role that the leading fuel companies will play in this development. The leading implication would be that refineries, already struggling, and even terminals around the country, would need to invest some degree of capex into their assets to facilitate the changes. With this, motoring bodies such as the NRMA are concerned oil companies may take advantage of the changes and increase the price differential for premium fuels. If refineries opted to close instead, a reliance on fuel imports would hurt motorists even more.

As reported by the Sydney Morning Herald, regular unleaded fuel is used by nearly 80% of motorists outside NSW. Its removal would be sure to draw ire from many in the community. It’s certainly time we cleaned up our game and improve the quality of our fuel, however, offsiding the majority of the population is something that clearly goes against reason. With more practical alternatives being proposed in the form of sulphur limitations, it’s logical we use those as the starting point of what is a much-needed reform.

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23 comments

  1. Harry Harris says:

    Not happy.

    I am a boater and ethanol fuel is a MUST NOT USED as ethanol takes on water. UPL is great

    January 23rd, 2017 at 9:39 am

  2. Bernard Chen says:

    All this proposed change will do is increase the amount of regulations in this country to make it more noncompetitive. It will also provide Oil companies an other excuse to increase petrol prices that are already at a large premium to motorist. Allow the market ( the spending consumer to dictate and not by allowing government bureaucrats to dictate ) prices. It is yet another lobby by City-centric residence with little care or relevance to citizens that live outside the city.
    What the government should be encouraging by way of reducing barrier s to investment so that we will have more players in oil refining inthis country and not less as the example in north America where large amounts of competing refineries have have seen a pump prices move in same magnitude as the price of a barrel of oil.

    January 23rd, 2017 at 9:54 am

  3. Brian Hannan says:

    “Advocates will suggest that higher grades have a greater driving range that actually make them cheaper to fill per tank.”

    In Feb 2016 tests by Ford were the subject of comment by the RACV who stated “”I had a gut feeling that it wouldn’t be cost effective and that turned out to be the case,” Mr Cumming said. “If people divide the kilometres by the price, they will find that it’s not value for money.”

    January 23rd, 2017 at 10:33 am

  4. Tony says:

    The whole thing thing needs looking at.
    Coles station near my home. Ulp $1.39 per litre
    Independent 5 mins away Ulp $1.15 24 cents a litre cheaper.
    Pass another Coles on the way also $1.39
    Subsiding Coles vegies?
    My cars cannot run on e10

    January 23rd, 2017 at 10:38 am

  5. Laurie Stroud says:

    Last year I used regular unleaded with ethanol for a couple of months in my Tiida, thinking it was good for the environment and a cost saving measure. I found it increased fuel consumption between 8-10%. This was not calculated on a scientific basis – I simply did my sums every time I filled the tank. That was near enough for me to decide that the 2 cent per litre “saving” at the pump was more than wiped out by the higher by the higher usage of petrol.

    January 23rd, 2017 at 10:47 am

  6. Bruce says:

    Firstly, can everyone stop referring to petrol as ‘unleaded’. Lead was removed from petrol back in 1986 (and of course, people complained then about that at the time, but we, and the world, are better off for that change).
    Secondly, if the reason for improving the quality of the fuel sold is primarily to improve fuel efficiency and improve urban air quality, then the price of the cleaner fuels is also well worth it. The current difference between 95 and 91 is less than a takeaway cappuccino for a tank.
    As usual though, everyone will only focus on any price increase and the environmental benefits will be sacrificed in the mindless arguments about misguided government, greedy fuel cartels and ‘bloody greenies’.

    January 23rd, 2017 at 10:51 am

  7. Kenneth Smith says:

    I carefully monitor my fuel consumption and found that I consistently got degraded endurance in the order of never less than 8% using E10 as opposed to regular unleaded, As the price difference between the two fuels is approximately 1.5% at current pricing, one is penalised quite noticeably by using E10,
    In my case this works out at a cost penalty of round $120 per annum.

    Life is expensive enough as it is without such actions that will and more cost without any benefit.

    The other aspect of this diktat, is that people who own power tools such as lawnmowers, and who operate outboard motors that are not compatible with E10 will be forced to buy 95RON, for these applications.

    Shell in Queensland dropped selling E10, not for the convenience of the Company, but because buyers were not prepared to convert from 91RON to E10 out of perversity, but because they caught on that it actually cost them more.

    January 23rd, 2017 at 10:57 am

  8. Peter says:

    Fuel companies now use regular unleaded fuel as their ‘hook’ to get people in, then gouge huge profits from both 95 & 98 RON.
    By having 95 as the standard, the fuel companies will be forced to use that as their hook, so the price will come down from where it is now.
    European cars, particularly diesel ones, have been suffering for years on our dirty fuels.
    Time to clean up their act!

    January 23rd, 2017 at 11:28 am

  9. Mauro says:

    What a lot off crap thay say that a tank last longer when racv test seggest marginal not cost effective and second that its going to cost millions to up date the Australian refineries but guess what we inport owe fuel from Singapore so the oil companies can squeeze every cent out of us
    Not happy

    January 23rd, 2017 at 11:35 am

  10. Fred Bloggs says:

    Honestly, the savings are not there with running premium fuels and I can’t see how the government plans to pull the wool over our eyes to convince us otherwise.

    Over the past 17 years (since 98 PULP was introduced) I have experimented with running different fuel types.

    Even with my sports cars (Honda S2000 / Porsche Boxster which I race at club track days) I use regular ULP for all my daily use – yes, performance is slightly reduced,but not measurably, and fuel consumption doesn’t change at all – however, fuel savings of up to 25% (in Victoria) are available in return.

    For the track days I simply fill up with 98 on the drive to the track and Bob’s yer uncle. 🙂

    Meanwhile, the wife’s Lexus has been running regular since day one despite the manual stating only 98. With over 275K kms on the odo I would have expected problems before now if there were going to be any.

    January 23rd, 2017 at 11:39 am

  11. Clive Ferguson says:

    We have already changed to premium fuel for my wife’s Prius as we had injector problems during the car’s warranty period caused by dirty fuel. The hybrid is more affected than normal cars. However as the poor quality of the fuel affects all cars, I also run my own car on premium from time to time.

    January 23rd, 2017 at 11:40 am

  12. Ken Potter says:

    Hi instead of reinventing the wheel by having new cars imported into Australia being modified to Australian Standards.
    English and French Cars with there Euro 6 return better fuel economy than a new modified Australian car.
    My experience with 3 new cars was vastly different. By using super Unleaded was no better than using Ethanol 85% fuel.
    I am now running a Citroen C4 Cactus Diesel and the returns are fantastic, 3.6 L/100-km. They are fantastic to drive and give you the economy that is on the Screen details. Unlike the new Mazda 3 which had 4.7L/100 and because I drive for economy on our trips on Extra Urban the best I could get was 7.79 L/100. The Mazda 3 a dreadful car and Mazda Australia would do nothing about the dreadful economy.

    January 23rd, 2017 at 1:31 pm

  13. Harry says:

    Why mess around with Unleaded Fuel, If Australia Adopts the Electric Car’s, As the Rest of the World is Slowly Going, And save on Emissions. Clean Energy all round.

    January 23rd, 2017 at 2:34 pm

  14. Rrrosco says:

    Well, I’m laughing. I drive a Nissan LEAF. Mess around all you like with fuel and prices, I don’t give a rat’s!

    January 23rd, 2017 at 3:52 pm

  15. Bob Weis says:

    I drive electric and when I drive into a servo to use the bathroom recently I realised I hadn’t been near petrol for eight months

    January 23rd, 2017 at 4:24 pm

  16. Bob Weis says:

    drove rather than drive

    January 23rd, 2017 at 4:25 pm

  17. Brian says:

    Good imformative article, thanks.

    January 23rd, 2017 at 5:52 pm

  18. Chris says:

    As a diesel driver I know that 30% of fuel sold is diesel. In rural areas that would match petrol for litres sold. I think the 80% claim for unleaded is a dodgy figure. Besides how manny old Commodores Are there left that run on plain unleaded?

    January 23rd, 2017 at 6:10 pm

  19. Steve Atkin says:

    ULP 91 is being phased out from July 2017 in NSW & it’s anticipated nationally by the last quarter of 2018 . Regular ULP still contains 125 ppm of sulphur , whereas Premium 95/98 are 50ppm & diesel 10ppm. This is also being done to catch up with European standards on emissions regulations. Europe had 91 ULP briefly from around 1988 when unleaded fuel was introduced there until the early part of 1992 . Phasing regular unleaded out won’t make fuel any cheaper , with an anticipated starting cost for 95 ULP expected to be around $1.40-$1.45 cpl & diesel to stay around the $1.25-$1.30 cpl mark. This may effectively see a resurgence in more efficient diesel cars coming back to the market. After the initial flurry for diesel cars, sales dropped by around 25% over the last 3-4 yrs & many importers deleted several diesels from their ranges. As budgets tighten, finding a car that can do a thousand or so plus km to a tank & a dozen or so less visits to a service station a yr will become a more attractive option for a lot of people.

    January 23rd, 2017 at 8:27 pm

  20. Billnix says:

    I use E10 fuel in my Subaru 2007 wagon and PULP95 in my Volvo C70T5. Both give good mileage and using a higher grade of petrol does not improve the mileage one iota in my experience. I also use ULP on my Honda VT750 motorcycle. If ULP is discontinued it will not affect me too much, but the motorcycle will have to use PULP95 as Honda recommend not to use fuel blends with Ethanol.

    January 23rd, 2017 at 8:28 pm

  21. Jason says:

    Australian government is so backwards. It is applauded that they want to improve the environment, and maybe the petrol aspect needs to be addressed, but blind Freddy can see the world is gearing up for electric vehicles. Not only do they 100% improve the air quality in City/Urban environments (zero tailpipe emissions), but they also remove the risk of importing petrol products by using locally made electricity.
    The government should be investing aggressively on electric vehicle charging infrastructure (not just J1772, but also CCS and Chademo), otherwise we continue to be the dumping ground for cheaper, poor emissions quality vehicles. And once electric vehicles become price parity and readily available in the next couple years we will not have any infrastructure to support them.
    If they really believe they need to improve the environment and emissions from vehicles then it boggles the mind that electric vehicles are not top of their agenda and being promoted and supported.

    January 24th, 2017 at 6:34 am

  22. Bob Chantrell says:

    How much polution goes into making and salvaging batteries and should this be counted,
    Every five years or so a prius needs new batteries, or so I have been told, costing about $5000. What a trap for those who can not afford a new car!

    January 25th, 2017 at 6:25 am

  23. Bruce says:

    In reply to Bob Chantrell: This ‘myth’ about the cost of making batteries and needing to replace them needs to be countered. Do people with hydrocarbon fuel tanks think that the fuel magically appears at the petrol station? Do they realise how much infrastructure and pollution lies behind their adding energy every time they fill up to their simple fuel tank? And no, batteries don’t need to be replaced after 5 years. Rechargeable batteries suffer some loss of capacity; 20% after 10 years seems to be the reality, but in a hybrid in particular, this makes little difference to performance. How many 10 year old ICEs (internal combustion engines) still produce the same power or have the same efficiency (or don’t leak oil) as when they were new?
    And as for people thinking petrol prices will ever come down. It’s a finite resource, and more and more people around the world want some. Supply is going down and demand is going up.

    January 25th, 2017 at 2:28 pm