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<\/p>\nLate 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.<\/p>\n
While being touted as a move that could eliminate 65 million tonnes of greenhouse gas emissions before 2030, and also potentially affording motorists\u2019 savings upwards of $500 per year in fuel costs, not everyone is cheering the news.<\/p>\n
The outcry isn\u2019t 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.<\/p>\n
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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 \u2013 premium unleaded (95).<\/p>\n
Advocates will suggest that higher grades have a greater driving range that actually make them cheaper to fill per tank. They\u2019ll also note the record number of new car sales, suggesting more and more motorists are converting to vehicles that \u2018benefit\u2019 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.<\/p>\n
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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.<\/p>\n