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Johannesburg.
FUEL producers and retailers are bracing themselves for an investment of up to R20 billion to provide for the new grades of fuel the government is introducing soon.
The department of energy confirmed yesterday that an announcement regarding new petrol and diesel standards in SA was imminent.
“It’s difficult to talk about details right now, because we haven’t announced the proposal,” said Ndivhuwo Khangale, a spokesman at the department.
However, he said an announcement in this regard would be made “very soon”.
The government cannot delay the introduction of cleaner fuels for much longer as it is unfair to levy a carbon tax on cars if their owners do not have access to fuel that reduces their emissions.
The technology used in fuel-efficient cars requires cleaner fuel than the standard legislated in SA. Not having the fuel available means owners of the newest cars cannot get better fuel consumption and, therefore, emit lower levels of carbon dioxide.
The carbon tax was introduced for new passenger cars in September last year, and new double-cabs will be next — in the first half of this year.
But the new standards will also have far-reaching implications for fuel producers and motor manufacturers.
SA’s fuels at present adhere to the 1996 Euro 2 standard regarding sulphur content and octane levels.
This outdated fuel was sold locally because of SA’s legislated fuel grades, South African Petroleum Industry Association director Avhapfani Tshifularo said yesterday. “If you go out on the global market to buy our fuel, you can’t find it. It doesn’t exist,” Mr Tshifularo said.
“Fuel is downgraded for SA,” he said, and the legislation “needs to move on”.
However, the introduction of new grades posed challenges to fuel producers and retailers, he said. “If we make the fuel locally, the upgrade to our refineries would cost US$2- 3 billion.”
Even importing widely available Euro 5 fuels, a solution proposed by the National Association of Automobile Manufacturers of SA, posed difficulties, Mr Tshifularo said.
“We would need to add another pump at each forecourt, and we can’t recover that cost through the fuel price because we’re a regulated industry.”
He also questioned the idea of imposing a levy on the cleaner fuels, saying it would penalise the use of environmentally friendlier fuels.
Rationalising grades was problematic because consumers used all the grades of fuel currently available in SA, Mr Tshifularo added.
The industry likely to benefit from a modernisation of SA’s fuel grades is that of motor manufacturers and importers, who at present have to modify engines to cope with SA’s poor fuel quality, and often do not import entire engine ranges for the same reason.
Individual manufacturers were unwilling to comment yesterday, but Naamsa director Nico Vermeulen confirmed that the motor industry body had been involved in discussions regarding fuel quality with both the oil industry and “various government departments”.
Mr Vermeulen said Naamsa had advocated “aligning SA’s fuel standards with international norms” and had pushed for the introduction of Euro 5 fuels, the current global standard. “Clean fuels are absolutely essential,” he said. — Business Day.
Modern fuels would also have a significant effect on the kinds of cars available for sale in SA, Mr Vermeulen said.
The introduction of such fuels would allow manufacturers to import, and manufacture locally, low-emission vehicles.
“We would be delighted if there was an announcement of the early introduction of enabling fuels,” he said, adding that carbon dioxide taxation was only fair if fuels that enabled manufacturers to import the latest automotive technology were available.
“The proof of the pudding will be in the announcement,” Mr Vermeulen said.