Government plans to abolish standard unleaded fuel

Australian motorists face being slugged an extra 12 cents a litre under a Turnbull Government proposal to abolish standard unleaded fuel within the next two years.

Standard unleaded fuel is used by 80 per cent of motorists in Australia and the proposal to improve fuel quality, with benefits to our health and the environment, will see it replaced by a low-sulphur-content, 95-octane premium fuel that will at least improve performance in many cars, but at a cost.

Currently, premium unleaded costs up to 12 cents a litre more, so any change is sure to bring financial stress to many.

Our standard unleaded fuel is rubbish, experts say, due to its low octane level and high sulphur content.

How bad?

It ranks last of the 35 of the Organisation for Economic Co-operation and Development (OECD) countries and 66th in the world.

The octane rating is 91 RON and the sulphur content is 150 parts per million (ppm), which is one of the highest figures globally and responsible for the rotten egg stink we encounter in traffic from time to time. Australia is massively out of step with the rest of the world. While our premium unleaded might be 95 RON, the sulphur content is still very high at 50ppm.

To put that in a global context, the maximum sulphur limit in Europe is 10 ppm and the minimum fuel octane rating is 95 RON.

The USA also has a maximum sulphur level of 10 ppm but their octane rating varies from 92–96 RON. Europe, Japan and South Korea all have maximum sulphur levels of 10ppm.

So why not just switch to E10 I hear you say? While it has an octane rating of 94 and is often cheaper than standard unleaded, only 10 percent is ethanol, with the other ninety percent standard unleaded fuel, containing 150ppm of sulphur.

The Government paper, aimed at raising fuel standards, outlines several options including the phasing out of standard unleaded fuel over the next two to five years, reducing sulphur in premium unleaded from 50ppm to 10ppm, and bringing our fuel into line with Europe, with a limit of 10ppm on all fuels.

A recent EU study revealed that 10ppm petrol presents the possibility of reducing NOx (nitrogen oxide, a primary air pollution contributor) by 21 per cent and non-methane hydrocarbons (NMHC) emissions by 13 per cent.

What's the local cost?
The operators of Australia's remaining refineries, two in Victoria, one in WA and another in Queensland will have to undergo significant upgrading to the tune of $1.15 billion – according to the Government paper – to produce the new low sulphur content fuel. This could threaten their viability and lead them to abandon Australia. Then we'd have no choice but to import all of our fuel, as is the case with our cars, from 2018.

Should that occur, Australia will be at the mercy of international pricing, currency fluctuations, never mind international oil or transport strikes. This could affect everything from the price at the pump to goods on supermarket shelves, given our dependence on road transport.

Motoring group RACV supports the continued availability of alternative fuel types to support the Australian fleet, but notes it remains to be demonstrated that phasing out 91 RON fuel would be effective in reducing noxious emission, on a fleet-wide basis (particularly given the age of the fleet).

The RACV also supports the availability of low-sulphur, high-octane fuels to ensure supply of lower-emission vehicles into the market.

Furthermore, the RACV acknowledges that while premium unleaded costs about 12 cents a litre more, there's no additional emissions benefit for most older vehicles, as they don't have the technology required to take advantage of the higher octane fuel.

There's more.

The Federal Chamber of Automotive Industry (FCAI) warns that unless Australia adopts the fuel standards recommended by the Worldwide Fuel Charter (mandated 95 RON standard grade petrol; 10ppm sulphur) buyers may miss out on some models as manufacturers deem them uneconomical to produce /petrol-engines-as-economical-as-diesels-4739, to comply with our standards.

Right now, there is no one answer and the debate rages on in Canberra.

It seems almost unavoidable that improvements are necessary to our fuel quality, which will inevitably lead to more pain at the pump, whether it is made locally or not.

Manufacturers are producing cars with greater emissions and fuel-saving technologies, designed around 95 RON Premium unleaded with 10ppm sulphur content. And if we want them here we must toe the line.

Right now, 80 per cent of Australian motorists use the lesser quality standard unleaded fuel.

If the phasing out is to be undertaken, let's hope the Federal Government does it gradually and over a long time frame, as they did with leaded fuel back in the mid-1980's.