The real cost of dumping regular unleaded

Joshua Dowling
January 24, 2012 – 4:46PM
The Age

NSW has removed most of the regular unleaded fuel from petrol stations to make way for E10.

What the government should do to ease the pain at the pump.

The removal of regular unleaded fuel from petrol stations across NSW – the only Australian state to do so – is an even bigger rort than many motorists may realise.

Since the then Labor NSW government legislated the switch to a basic ethanol blended fuel (E10) in 2007, the price of premium unleaded petrol (PULP) has risen more sharply than the price of regular unleaded.

A report by the Australian Competition and Consumer Commission published last year showed that, over the period from July 2007 to June 2011, the differential between the retail price of regular unleaded and PULP 95 increased by 3.9 cents per litre to about 10.1 cents per litre.

The differential between the retail price of regular unleaded and PULP 98 increased by 4.6 cents per litre to about 14.5 cents per litre.

Some people have already begun to twig to the scam.

“Mick”, a petrol distributor in central NSW, told Radio 2GB this morning: “I’ve noticed since the government mandated the E10, the disparity in the premium price to the unleaded price has slowly grown, because the fuel companies know that people are going to have to go to this premium fuel and they’re starting to think, ‘we can benefit out of that’.”

So here’s a suggestion for the Premier of NSW, Barry O’Farrell: pass legislation that requires all petrol retailers to display the full price of PULP – before shopping docket or other discounts – on their large outdoor display boards.

PULP now accounts for about a quarter of all petrol sales.

Compulsory outdoor pricing of undiscounted and unblended PULP might encourage enough competition to make the fuel slightly more affordable for the 750,000 NSW owners of vehicles whose pre-1986 cars can’t run on E10.

It would also benefit the increasing number of newer vehicles that also insist on premium petrol.

Why should these drivers continue to get stiffed with less obvious pricing competition? Today, in most cases, drivers requiring PULP don’t know the price of the fuel until they pull up to the bowser.

The government may also want to find a way to monitor or restrict new, ethanol-blended PULP fuels, which some smaller outlets are starting to sell.

EPULP will only add to motorist confusion – who will pick up the tab if a driver of a pre-1986 vehicle mistakenly fills his or her car with ethanol-blended premium petrol?

The consequences of using EPULP in an unsuitable car are the same as using E10: it will ruin the fuel delivery system.

The other point lost in this debate is the miniscule reduction in emissions. Litre per litre, ethanol produces about 37 per cent less C02 tailpipe emissions than regular unleaded – 1.51kg per litre compared to 2.39kg per litre.

But you need to burn more ethanol blended fuel to travel the same distance as a car using regular or premium unleaded.

Science tells us that ethanol burns 34 per cent faster than regular unleaded – which means the net benefit at the tailpipe is diminished.

The reduction in C02 emissions at the tailpipe can be as little as 2 to 10 per cent, while the cost benefits are also debatable, despite the lower price at the bowser.

As has been widely reported, regular unleaded bowsers are due to disappear from NSW petrol stations by July this year, but some operators have removed them early.

In the meantime, stand-by for an increase in “drive-offs”, or what police report as “fail to pay” for petrol.

According to the NSW Bureau of Crime Statistics and Research, there were 9526 “drive-offs” in the state from July 2010 to June 2011.

The Bureau estimates that every 10-cent increase in the price of a litre of petrol generates another 120 incidents of petrol theft (technically: service station fraud) per month.

Imagine what will happen when 750,000 motorists are suddenly forced to pay more than 10 cents per-litre more than regular unleaded. Sadly, we won’t need to imagine for very long.

The Bureau predicts that if petrol prices reach $1.70, the number of incidents of petrol theft will climb to 1600 per month – more than double the current rate of 750 per month. 


Theft of vehicle number plates will rise more sharply, too.

The Bureau says number plates remain the most frequently stolen item from cars – and number plate thefts are already up 32.8 per cent in the 12 months to September 2011.

Almost as many number plates are stolen as there are petrol “drive-offs”. The Bureau says 8990 number plates were stolen from vehicles between July 2010 and June 2011.
Theft of number plates is an avoidable inconvenience for otherwise law-abiding citizens.

I have several friends who’ve woken to a bare car, and then had to turn their day upside down to fill in paperwork and get new number plates from the RTA.

All this, and for what?

Clearly, people who own pre-1986 cars won’t be the only ones who’ll pay dearly for the ban on regular unleaded.