Discussion Paper On Proposed Petrol Regulation Changes

Dropping requirements to colour petrol should make it easier for new entrants to the New Zealand oil industry to import petrol, Energy Minister Max Bradford said today when he released a discussion paper proposing changes to petrol regulations.

Mr Bradford said the discussion paper, produced by the Ministry of Commerce and the Oil Industry Technical Committee, proposed a number of changes to the Petroleum Products Specifications Regulations 1995.

"One proposal is to drop the requirement to add dyes, making it easier for importers to source petrol from overseas where the trend is towards undyed petrol," Mr Bradford said.

"This is important given that the Marsden Point Refinery cannot meet domestic demand and much of New Zealand's petrol is imported. It promotes competition in the New Zealand oil industry by making it easier for new entrants, who do not have access to the Marsden point refinery, to import petrol."

The discussion paper suggested the original reasons for colouring petrol were no longer justified; general consumer protection law and testing by the Energy Inspection Group of the Ministry of Commerce provided adequate protection against mixing and dilution of petrol; and colour as a lead warning was redundant in New Zealand now that only unleaded petrol was sold.

Mr Bradford said another proposal was to extend the aromatics limit for wholesale premium unleaded petrol to both petrol grades at both retail and wholesale levels.

The background to this proposal was that in March 1996 a shipment of premium unleaded petrol was imported to New Zealand with an abnormally high aromatics content. This affected the rubber componentry of some vehicles.

The Government immediately imposed a 48 per cent aromatic content limit on premium unleaded petrol at the wholesale level. The new limit did not apply at the retail level at that time because it was not practical for retailers to immediately blend the new petrol in their tanks.

"However, petrol complying with the 48 per cent limit has now had time to flow through the distribution network.

"The proposed change closes the loophole left in the regulations so that the 48 per cent aromatics limit applies to both retailers and wholesalers, and to both petrol grades to avoid the possibility of future problems."

The Ministry of Commerce is inviting submissions from interested parties on the proposed changes.

Copies of the discussion paper are available from the Ministry of Commerce.