National Fuel Quality Standards Regulation Impact Statement 1 ...

standards and advanced engine and vehicle technology to achieve improved fuel
efficiency. The Federal Chamber of Automotive Industries (FCAI) is in favour of
mandatory enforceable national fuel standards.
An issue raised by the FCAI relates to the simultaneous availability of 91 RON and 95
RON fuels. The industry is concerned about potential misfuelling of Euro 3 vehicles
(designed for 95 RON fuel) with 91 RON fuel and resultant complaints from consumers
should unsatisfactory engine performance result. However, little data is available on the
likely rate of misfuelling. Some vehicle manufacturers detune their vehicles to run on 91
RON fuel. Both misfuelling by consumers and detuning by manufacturers contribute to
reductions in fuel efficiency and therefore increases in greenhouse gas emissions.
5.5.6 IMPACT ON CONSUMERS
As indicated in Section 5.5.2 above, the Fuel Quality Review estimated that the
introduction of Euro 4 petrol by 2008 and Euro 4 diesel by 2006 would result in an
increase in the cost of fuel production of 1.1c/l for petrol and 1.5c/l for diesel. It is
probable that these costs would be passed on to consumers as increased fuel prices.
However, for new vehicle owners, improved vehicle technology combined with high
quality fuel will lower fuel consumption, leading to potential savings.
Economic analysis conducted as part of the Fuel Quality Review, using a General
Equilibrium Model, estimated that a 1% increase in fuel prices would cause minor
economic impacts such as an increase in the Consumer Price Index (less than 0.02%) and
a fall in real wages (0.08%). It should be noted though, that this level of price increase
currently occurs under fluctuating fuel prices caused by changes in the cost of crude oil.
Large populations of urban dwelling consumers will benefit from the reduction in
pollutant emissions and resultant improvement in air quality outlined in Section 5.4.
6. CONSULTATION
The process for developing national fuel quality standards commenced with the Fuel
Quality Review. The final report from the Review was released in March 2000. Three
discussion papers were then released in early May 2000 for a two-month public comment
period with submissions requested by 30 June 2000. The papers present the
Commonwealth’s proposal for fuel standards and are entitled:
1. Summary Report of the Review of Fuel Quality Requirements for Australian
Transport;
2. Proposed Standards for Fuel Parameters (Petrol and Diesel); and
3. Proposed Model for Standards Implementation.
Fuel Quality Review
In order to assess the potential impacts of new fuel quality specifications on all
stakeholders, including Australian refineries, vehicle manufactures and consumers, and