Government in clash over fuel plan

Vehicle makers voice deep concern over new regulations they say will add to costs

THE government and the vehicle manufacturing industry are headed for a showdown over proposed new fuel regulations which could make both cars and fuel more expensive.

The Department of Energy stands accused of not meeting global standards for clean fuel‚ leading to pollution and potentially fatal health hazards‚ and of sabotaging the competitiveness of the country’s vehicle manufacturing industry.

In a strongly worded letter to the department‚ the National Association of Automobile Manufacturers of SA (Naamsa) has proclaimed itself “incredulous” at draft regulations published by Energy Minister Tina Joemat-Pettersson.

Naamsa believes the regulations open the door for South Africa to fall even 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 the manganese content of local fuel to increase‚ meaning worse pollution from fuel emissions.

Vermeulen said if the draft regulations were enacted‚ this would mean local fuel would not conform to European standards.

This meant South African car manufacturers would have to assemble two versions of each model – one built to use local fuel‚ and another built to European standards‚ where cleaner fuel was used.

Such duplication would cost the country’s economy dearly and was completely unnecessary‚ Naamsa said.

“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‚” Vermeulen said.

But department planning and policy deputy director-general Ompi Aphane said the government was keeping an open mind‚ would not be prescriptive and would only finalise the process by March.

Aphane acknowledged the differences in opinion within the oil sector on the extent to which manganese as an octane booster should be added to fuel‚ the concerns raised by Naamsa and growing public interest.

Because of this, he said, the department was considering widening its consultation from a closed regulatory process to an open public participation process.

Aphane undertook to take into consideration the inputs and interests of the oil sector‚ the vehicle manufacturing sector and the manganese sector.

Also to be considered would be health and environment issues‚ as well as the added cost to the consumer if the government implemented European fuel standards as significant capital investment in refineries would have to be financed by a higher consumer fuel price.

“In the end‚ we will take the decision which is best for the country‚ obviously taking into account the impact on the export market.”

Aphane said it was disingenuous to claim no manganese was added to local fuel. Rather, at issue was the level of manganese added.

He also differed from Naamsa on the residue South African fuel would form on catalytic converters of cars built to European standards.

DA energy spokesman Gordon Mackay said the issue of cleaner fuels had 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,” he said.

“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 prices‚” he said.

This would affect the economy and jobs.