Car makers and state head for dispute on proposed new fuel regulations

The Department of Energy stands accused of putting lives at risk by not meeting global standards for clean fuel, leading to pollution and health hazards, and of sabotaging the competitiveness in the industry.

The National Association of Automobile Manufacturers of South Africa (Naamsa) said in a letter to the department it was "incredulous" at draft regulations published by Energy Minister Tina Joemat-Pettersson. Naamsa said they would lead to SA falling further behind leading countries regarding clean fuel.

Naamsa director Nico Vermeulen said not only was this an entirely unnecessary result of government not acting timeously, but the new regulations also opened the door for manganese content of local fuel to increase, meaning worse pollution from fuel emissions.

Vermeulen said that if the draft regulations were enacted, it would mean local fuel did not conform with European standards. This means South African car manufacturers must assemble two versions of each model - one to handle local fuel, and another built to European standards, where clean fuel is used.

Such duplication costs the country's economy dearly and is completely unnecessary, Naamsa argued.

"Government is dragging its heels. The initial government deadline for clean fuel in South Africa was 2017. Now we will be lucky if it is 2022," said Vermeulen.

But the department's deputy director-general: planning and policy, Ompi Aphane, said government was keeping an open mind, would not be prescriptive and would finalise the process only by March. He said differences in opinion in the oil sector on how much manganese was added to fuel as an octane booster, Naamsa's concern and mounting public interest meant the department was thinking of widening consultation from a closed regulatory process to open public participation.

"We will take into consideration the inputs and interests of the oil sector, the car manufacturing sector, the manganese sector, health and environment issues, as well as the added cost to the consumer if we implement European fuel standards - significant capital investment in refineries would be financed by a higher consumer fuel price," said Aphane.

"In the end, we will take the decision which is best for the country, obviously taking into account the impact on the export market."

He said it was disingenous to claim no manganese was added to local fuel - the issue was how much. Aphane also differed from Naamsa on the residue South African fuel would form on catalytic converters of cars built to European standards.

DA shadow energy minister Gordon Mackay said cleaner fuels barely received attention from Parliament as a result of the administration's obsession with pushing through the nuclear deal.

"Once again government is turning a blind eye to critical policy areas, which have real impact on economic growth and jobs.

"The crux of the issue is that oil companies and government refuse to pay for the necessary upgrades to refineries to ensure the production of cleaner fuels, meaning that at some point consumers will be forced to carry the cost through higher petrol price," he said.

"Such an increase will cause costs across the economy to climb negatively affecting economic growth and potentially jobs as well," said Mackay.

Source: BDpro