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8:50 pm AEST March 3 2000

Call for shake-up of fuel standards

AAP -- Pressure is mounting for a wider shake-up of laws governing additives to petrol and diesel following revelations of widespread substitution scams.

As the federal government looked at its options for applying excise to the solvent toluene, the national motoring body today called for much stronger standards governing fuels.

"The current standards are out-of-date, inappropriate and do not address the sort of substitution and dilution problems we are currently seeing," Australian Automobile Association (AAA) technical director David Lang said.

He said he had written to Standards Australia calling for urgent development of standards specifying content and maximum levels of additives.

The Australian Taxation Office (ATO) revealed that toluene was merely the latest in a line of additives used to scam the taxman and consumer.

Prime Minister John Howard called on the states to work with the federal government to help fix the scam rather than shifting blame.

"We are examining urgently at a federal level whether there's any excise change that can be made in order to deal with people who are engaging in substitution," Mr Howard told Melbourne radio 3AW.

"I don't know what the state governments have done and I didn't start the process of blame shifting," Mr Howard said.

New South Wales Fair Trading Minister John Watkins yesterday blamed Assistant Treasurer Rod Kemp for ignoring a letter on the problem.

But Mr Howard defended Senator Kemp and said the issue was being addressed.

The AAA's Mr Lang said it was essential any new national standards were backed by appropriate random testing by government.

"This is the only way to ensure that domestically produced and imported fuel meets the specified standards," Mr Lang said.

Treasurer Peter Costello yesterday backed down from his initial refusal to levy an excise from products which were used in the fuel substitution scam after he found he was at odds with Mr Howard on the issue.

And Opposition treasury spokesman Simon Crean accused him of falling asleep at the wheel over the controversy.

"Peter Costello fell asleep at the wheel on this issue," Mr Crean told ABC radio.

"He's finally been forced to back down on the view that nothing needs to be done and now accepts that something has to be done in terms of the excise approach."

The ATO said unscrupulous dealers had apparently begun importing the solvent toluene in bulk after earlier substitution rackets were thwarted.

Tax Commissioner Michael Carmody said revised tariff arrangements recommended by the ATO had already closed off fuel substitution scams uncovered in mid-1999.

But the use of toluene as a substitute became known to the ATO only this year.

Mr Carmody also criticised reports of the size of the scam.

"Claims of a $100 million-plus excise evasion racket involving imported toluene are equally simply untrue.

"Even if all the toluene imported in the last three and a half months were used in fuel substitution - and clearly it has not been, the total amount involved would be less than $10 million."

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Comment:
The petrol additive scam is continuing news in Australia, but it has been going on for donks apparently. I wonder what damage it can do to your engine. Also I wonder if such things go on elsewhere...

Regards from OZ

-- Pieter (zaadz@icisp.net.au), March 04, 2000