31st March, 2005

NAAMSA MEDIA RELEASE

CLEANER FUELS FOR A BETTER ENVIRONMENT

The South African Automotive Industry supports the decision made by Cabinet to approve the introduction of cleaner fuels for South Africa from January 2006. In essence, effective January 2006, all petrol will be free of lead and low sulphur diesel fuel will also be introduced as part of a process of aligning South African Fuel Standards with International Fuel Specifications and Vehicle Technology Requirements and, importantly, to improve air quality and ultimately create a healthier environment.

Vehicles, both gasoline and diesel, can emit significant quantities of nitrogen oxides, sulphur oxides, particles, carbon monoxide and hydrocarbons. These pollutants can be reduced by adopting lower sulphur and metal free fuels and at the same time integrating this with the introduction of new vehicle technology and emission control devices.

From the beginning of 2006, leaded petrol will be phased-out in South Africa and new octane grades introduced. The decision by the authorities is part of a process that will see newly formulated fuels being introduced which will contribute to the improvement of urban air quality and the environment generally. These cleaner fuels will also enable more sophisticated vehicle engine technology that is designed to reduce harmful vehicle emissions and promote improved fuel efficiency.

The changes that will take place as from 1 January 2006 include -

	Lead will no longer be blended into petrol and leaded petrol (93 RON (research octane number) inland and 97 RON at the coast) will no longer be marketed.
	Motorists will have a choice between 91, 93 and 95 RON metal free unleaded petrol which will be marketed nationally. The oil companies will market the octane grades according to market demand.
	A lead replacement petrol (93 RON inland and 95 RON in coastal areas) will be introduced into the market to cater for certain older vehicles that might be susceptible to valve seat recession when driven at high speed and under heavy load conditions. The lead replacement fuel will also be provided according to market demand. Metal containing petrol will be classified as lead replacement petrol and the metal additive content will be indicated on the fuel pump.
	The introduction of a (demand management) levy will result in the price of 95 RON being relatively higher than the other octane grades in the inland regions in order to encourage motorists not to use an octane grade that is higher than necessary for their vehicle. Government has identified the need to manage the inland uptake of 95 octane petrol in order to limit octane wastage inland so as to avoid the additional costs to the country of producing octane grades that are higher than actually needed by motorists and to avoid potential refinery capacity problems. Inland areas are considered to be areas greater than 1200 metres above sea level. The effect of altitude is that most vehicles can use a lower octane petrol inland than they do at the coast. Details of the price differential will be announced by government in due course.
	A database will be available from about the middle of April, 2005 on NAAMSA’s website www.naamsa.co.za and will provide guidance to motorists which octane grade is recommended for their particular vehicle and whether the use of lead replacement petrol is recommended or not.
	The sulphur level of standard diesel will drop from the current maximum of 3 000ppm to a maximum of 500ppm. A 2nd grade of Diesel with a sulphur level of 50ppm maximum will also be made available from certain service stations from 1 January 2006.
	A lubricity specification will come into effect for all diesel marketed with a reduction in sulphur to ensure and improve vehicle fuel system life.

In summary, the South African Motor Industry welcomes the new unleaded petrol octane structure particularly since it allows the marketing of 95 RON unleaded petrol in the highveld region. General availability of a 95 RON unleaded petrol is required to support the introduction of the latest 'European' specification petrol vehicles which are increasingly designed for 95 RON unleaded fuel operation.

Reduced sulphur levels in diesel and provision of a low sulphur niche grade will facilitate the trend to clean, fuel efficient, diesel technology both in the passenger car and particularly in the light commercial sector – thereby assisting in alleviating the petrol/diesel manufacturing imbalance and diesel surplus in South Africa.

Average fuel consumption of passenger cars produced in Germany has decreased from 10.8 l/100km to less than 7.0 l/100km over the past 25 years and continues to decline. Appropriate European quality fuels are required if South African motorists are to benefit from these latest vehicle and engine technological improvements. Moreover, whilst the announced fuel quality improvements are a major step forward, further improvements particularly relating to sulphur level in unleaded petrol will be required in the future to enable the introduction of ‘lean burn’ catalyst technology currently being introduced by a number of vehicle manufacturers in Europe.

Importantly, the introduction of the improved fuel grades will over time contribute to a cleaner environment and these developments will bring South Africa closer in line with international norms and standards.

FOR FURTHER INFORMATION / INQUIRIES PLEASE CONTACT –

MR STUART RAYNER, CHAIRMAN, NAAMSA FUELS AND EMISSIONS COMMITTEE – TEL.: 012 842 2438

MR NICO VERMEULEN, DIRECTOR, NAAMSA – TEL.: 012 323 2980