South Africa will introduce cleaner, environmentally-friendly fuel, but only in five years’ time.
The minister of energy has gazetted new petroleum regulations requiring oil companies to introduce so-called “Euro 5” fuel specifications - the high-quality grades sold in the European Union and other first-world markets - by 1 July 2017. SA is still on Euro 2 fuel, which is not only ‘dirtier’ but has prevented certain newer-technology engines from being offered in this country.
The South African Petroleum Industry Association welcomed the new regulations, saying they would reduce harmful exhaust emissions, contribute to improved urban air quality and reduce greenhouse gasses.
The National Association of Automobile Manufacturers of SA, which has long campaigned for cleaner fuels, also welcomed the announcement.
“The reduction in harmful vehicle emissions will be significant.”
“It will enable vehicle manufacturers to market high technology, highly fuel efficient and low emission new motor vehicles in South Africa,” said Naamsa.
They added that the automotive Industry would continue to press oil companies to introduce cleaner fuels earlier than the July 2017 deadline. Until now the petroleum industry hasn’t voluntarily chosen to produce better quality fuel due to the cost of upgrading refineries.
DRIVERS ALREADY PAYING FOR A CLEANER ENVIRONMENT
It’s not yet known whether oil companies will be able to absorb this extra expense or if it will be passed onto consumers in the form of higher fuel prices. The government is still discussing the methodology on how the cost of modifying refineries is going to be recovered. It could be financial assistance directly from the fiscus or recovery in the form of a levy.
Drivers are already paying for a cleaner environment after being hit with a C02 tax in September 2010 where any car emitting more than 120g of carbon dioxide per km was taxed at R75 per gram. The great majority of vehicles sold in SA are over this limit and on average it raised prices around two percent.