Why Australia is allowing ‘high-sulfur’ fuel again; diesel standards also dropped
LATEST UPDATE, MARCH 25:
Australia has temporarily lowered its fuel standard for diesel in an attempt to boost supply across the country. It follows a similar decision made last week for unleaded petrol (see full story below), with the move designed to ensure more diesel is able to reach regional areas, farmers and domestic transport operators.
Unlike petrol, where sulfur content dictates the standard, diesel is measured by its ‘flashpoint’ — the temperature at which it ignites.
“This six-month adjustment will lower what’s known as the flashpoint for diesel, from 61.5 degrees Celsius, to 60.5 degrees Celsius, increasing diesel supply options from refiners and international sources,” said Australia’s minister for Climate Change and Energy, Chris Bowen
The move has “no adverse impact on engines or emissions”, according to the government. It also doesn’t require any changes to the way diesel is handled or stored.
MARCH 15
The Australian government has announced it will release a stockpile of previously restricted 'high-sulfur fuel’ to help boost domestic supply and ease the nation’s fuel crisis.
This easing of Australia’s fuel standards will release an additional 100 million litres of fuel per month, which equates to about two days’ of extra supply, and will be in place for the next 60 days.
While the additional fuel supply will be of a lower quality, the NRMA is urging motorists not to worry about filling up with ‘dirty fuel’.
“It’s not really dirty fuel in the sense that it’s going to hurt your engine,” said NRMA spokesperson Peter Khoury. “It’s the same fuel we were buying 12 months ago and beyond. It’s a temporary measure that’s designed to fast-track the refining process and make it a bit cheaper. It only affects petrol, it doesn’t affect diesel.”
The fuel is being prioritised for regional and rural markets, which have been hit hardest by the surge in petrol prices caused by the war in the Middle East. The closure of the Strait of Hormuz by Iran has closed off around a fifth of the world’s oil supply, leading to fears of a global fuel shortage.
Panic buying and fuel stockpiling has compounded the issue in Australia, with fuel prices climbing as demand far outstrips supply and retailers lift prices at the bowser.
Related: Top tips to save on fuel while driving
Australia recently introduced fuel standards relating to sulfur content, with ‘high-sulfur’ fuel instead sent to international countries with lower fuel quality controls. For the next 60 days, the previously restricted fuel will be mixed with Australia’s existing supply, instead of being exported.
The easing of fuel quality restrictions coincides with a separate announcement that Australia will reduce its minimum stock obligations for both fuel and diesel. In normal circumstances, fuel companies are required to maintain a minimum baseline of fuel but the government has ruled to release 20 per cent of that stock to improve supply.
But do these releases of previously rejected fuel pose any risks? And should you be worried about filling up with ‘dirty fuel’ that has a higher sulfur content?
Why has Australia lowered its fuel standards?
The Federal Government says the change is designed to quickly boost supply during a global fuel disruption. The conflict in the Middle East (including the closure of the Strait of Hormuz, which normally carries about a fifth of the world’s oil) has tightened supply and seen fuel prices spike considerably.
By temporarily allowing fuel with higher sulfur levels, Australia can redirect petrol that would normally be exported and instead blend it into the domestic supply. The move is expected to add about 100 million litres of additional fuel per month, easing pressure on distribution networks and helping bring down fuel prices at the pump.
“In order to assist with getting more supply, and secure downwards pressure on prices, I am temporarily amending Australia’s fuel quality standards to allow higher sulfur levels for the next 60 days” said Chris Bowen, the Minister for Climate Change and Energy.
How long will the new fuel standards be in place?
The relaxed fuel standards are a temporary measure lasting 60 days.
During that period, fuel with sulfur levels up to 50 parts per million (ppm) can be sold in Australia, compared with the normal 10ppm limit introduced in late 2025 as part of stricter emissions standards.
Can 'high-sulfur' fuel harm my car’s engine?
For most vehicles, the short answer is no.
The fuel being released was widely used in Australia until late 2025, meaning the vast majority of cars on the road have already been running on the lower quality fuel for years.
“The sulfur content is simply going back to what it was [before the stricter standard was introduced], so there’s no need for people to be nervous or afraid," said Khoury.
"What the government has announced is not going to hurt your car, it’s a temporary measure and it means that our fuel is on par with the quality of fuel being sold across a lot of the developed world.”
Higher sulfur content can reduce the effectiveness of modern emissions equipment, such as catalytic converters or particulate filters, but the temporary change is not expected to cause mechanical issues for most engines. The main drawback is environmental, as higher sulfur fuel produces more pollutants when burned.
When will the additional fuel be available?
The additional fuel will be released quickly into the supply chain, with distributors assuring the government they will prioritise regional and rural areas where shortages have been felt most.
The government says this should help ease shortages over the coming weeks.
Should I stockpile or hoard fuel?
No. In fact, authorities say panic buying is part of the reason supply has tightened in the first place.
The NRMA is urging motorists to remain calm and to only buy what they require.
“We have to be honest with our members and the reality is, it’s not a supply issue: we’re getting the same amount of fuel that we were getting before,” said Mr Khoury. “It’s just that oil prices are at record highs, the wholesale price is at record highs, diesel prices at the pump are at record highs and unleaded prices at the pump are almost at record highs.”
When will fuel prices return to normal?
“To get back to pre-war levels, we need the war to end,” said Mr Khoury. “We also need the Strait of Hormuz to re-open. About 15 to 20 per cent of the oil is stuck in the strait. Until we get a resolution and until this war sorts itself out, unfortunately we just don’t have good news for people.
“It’s all a result of the war, and the impact that it has had on oil prices globally and supply.
“Australia has no control – zero control – over the factors that determine oil prices, which in turn determine petrol prices. We have no control, whether it’s war today, or OPEC artificially cutting production to push up the price, or demand falling because of the concerns around the Chinese or European economy.”
