Fuel Standard (Petrol) Determination 2001 and the Fuel Standard (Automotive Diesel) Determination 2001

Regulation Impact Statement
Environment Australia, 2001

5. Identification of Affected Parties

The parties that will be affected by the introduction of national fuel quality standards are:

  • State/Territory government agencies
  • the refining industry
  • fuel importers
  • the automotive industry; and
  • business and consumers.

The most substantial impact will be on the domestic refining industry as significant investment will be required to upgrade refinery plant for production of the cleaner fuels. The amount of investment required will vary according to current refinery configurations and will be less for those refineries where significant investment has already been made, such as BP's Bulwer Island refinery in Queensland.

There will also be significant impact on importers who will be required to source the cleaner fuels to meet the standards at a higher cost and renegotiate contracts for the supply of petrol from 2004. Supplies of appropriate fuel from the local region (ie Asia) are limited and high freight costs would be involved to ship the fuel in from Europe or the Middle East.

The vehicle manufacturing industry is the next most affected party, however, the impact is significantly less than for the refining industry. The cleaner fuels with lower sulfur levels will facilitate the introduction of new emissions control technology and avoid warranty problems which could result from misfuelling with the lower octane and higher sulfur fuels currently available.

Small businesses and retailers in the fuel supply chain will be affected by the increase in price and restrictions on imports as a result of the standards. The higher cost to consumers of the cleaner fuels will have a greater impact on small business than large business which will be able to more readily absorb the cost. However, the increases in fuel prices modelled under the Fuel Quality Review (outlined in section 6.1 below) were based on harmonisation with Euro 4 fuels. Full harmonisation with Euro 4 is not expected to be implemented until 2008 - 2010.

During the process for developing the standards, every effort was made to engage all stakeholders. However, due to the very technical nature of the issues, and particularly in the discussion papers that were released for public consultation, there was very little interest from the general public.

It is also important to note that in many instances, the advice received from stakeholders was contradictory and arguments put forward were not supported by documented technical evidence to substantiate claims made about the impacts of the standards.