Oil Industry Urges Measures To Prevent Fuel Substitution Practices

The oil industry today urged Federal and State Governments to introduce measures to end once and for all fuel substitution practices.

The call follows exposure of the latest racket, which involves unscrupulous operators blending the solvent toluene into petrol, so as to evade payment of petroleum excise. Toluene is excise free, while petrol is excised at 44.1 cents per litre. Excessive toluene in petrol reduces engine performance and its continuous use will likely damage engines and fuel systems.

'Fuel substitution has been a major problem in the petrol and diesel markets for many years and has taken many forms', said Jim Starkey, Executive Director of the Australian Institute of Petroleum. 'These practices by a few unscrupulous operators in the industry affect motorists, fuel suppliers, and service stations alike, and cause a major loss of Government revenue'.

AIP and its member companies have worked with Government in recent years to introduce measures to combat specific fuel substitution practices. However AIP has always advised that the only really effective way to prevent fuel substitution practices is to address the root cause of the problem - differing excise rates for different petroleum products. Uniform excise rates across broad groups of petroleum products will remove the opportunity and incentive for the unscrupulous operator to blend low excise products into petrol and diesel.

'This problem has highlighted how important it is for the motorist to be able to be sure of the quality of fuel that they purchase, 'said Jim Starkey. 'The major marketers of petrol and diesel all stand by their product, and we urge motorists to buy their fuel from operators that they know they can trust'.

Motorists experiencing fuel problems should take the matter up with their service station operator in the first instance and with their State Fair Trading authorities.