Fuel price slug to cripple families
MOTORISTS will be forced to pay up to $645 more a year for fuel and will no longer get access to regular unleaded if the government pushes ahead with a controversial plan to reduce petrol emissions by 2020.
The Australian Automobile Association has warned drivers face huge increases at the petrol bowser as a result of a government proposal to ban the sale of regular 91 octane unleaded in the Australian market by 2020.
The peak motoring group, representing clubs like the NRMA, RACQ, RAA and RACV and their eight million members, yesterday urged the government to rule out the proposal in a pre-budget submission presented to the Coalition.
The measure is one of five key proposals the government is actively considering and was outlined in a discussion paper released in December last year.
Modelling by News Corp Australia based on yesterday's fuel prices shows if drivers were forced to buy premium 95 octane unleaded instead of regular 91, annual fuel prices could rise by as much as $645 a year.
This is based on filling up a standard Holden Commodore driving an average of 15,000 kilometres a year in Sydney.
The difference between regular and premium unleaded was 17 cents per litre yesterday at Sydney bowsers or $12.41 per tank.
Last year 91 octane unleaded accounted for 69% of all fuel sales nationally.
The measure to ban regular unleaded is part of a plan to reduce the amount of sulphur in fuel - and therefore noxious emissions - from 150 parts per million to the European standard of 10 parts per million.
E10 fuel is currently made using a mixture of 91 unleaded and ethanol and so would not be available in it's current capacity if regular unleaded was banned.
A new mixture of premium and ethanol would need to be made, at very minimal cost savings to the premium blend.
AAA CEO Michael Bradley said the government needed to take the option to ban regular unleaded by 2020 off the table and that a longer transition towards cleaner fuels was needed.
"There is no justification for such a dramatic move and the motorists of Australia will not thank a government that unnecessarily drives up petrol prices.
"The AAA wants to support the government's efforts to make Australian cars and fuels cleaner, but we want the government to be far more mindful of the costs associated with rushing these changes.
"We recognise that other countries have made this change, but they also took nine or ten years to do so, in order to protect consumers from price shocks. We should also be looking at what an orderly transition might look like."
Mr Bradley said Australia's four major remaining petrol refineries could pull out from the local market forcing all fuel to be imported from overseas, again increasing costs for motorists.
Minister for the Environment and Energy Josh Frydenberg yesterday refused to rule out 91 unleaded would be banned in Australia from 2020.
"As part of the Ministerial Forum on Vehicle Emissions, the government is examining Australia's Fuel Quality Standards," Mr Frydenberg said.
"We will need to look at the potential impacts on refineries and fuel prices before making a final decision on any changes to fuel quality standards.
"The Government will only be making changes that are clearly to the benefit of Australia."