Unleaded fuel regulation may raise costs for car buyers

The UAE's decision to allow car imports only if the engines are equipped to run on unleaded gasoline as of next January 1 could translate into higher costs for car buyers, industry officials said. They said catalytic convertors that are essential for vehicles running on unleaded fuel engines will carry a slight mark-up.

The Ministry of Finance and Industry has issued a notice "not to import gasoline run cars unless they are designed and equipped to run with unleaded gasoline starting from 01/01/2002. Standard for unleaded gasoline should be acquired from the Directorate of Standardisation and Metrology in the ministry." A five-year grace period has been granted from January 1, 2002, to convert cars to run on unleaded fuel.

"For some time now all major manufacturers have been shipping in vehicles which can run on both leaded and unleaded fuel, offering car users the option to decide which fuel to use," said David Glorius, vice-president for the Chrysler/Jeep/Dodge division at DaimlerChrysler. "It becomes an issue only when leaded fuel is used in those vehicles equipped to run on unleaded gasoline alone.

"The UAE decision ensures that car buyers will have the freedom to choose from a wider model range and engine sizes, an option not available to them earlier as engines were being built to carry leaded fuel as well. Obviously, the decision is going to have a very favourable impact on environmental and health grounds."

S.Y. Guerrero, general manager for sales and marketing at Al-Futtaim Motors, said, "The ministry's decision is a welcome initiative and part of GCC-wide policy. The switch from leaded to unleaded will have no effect on the durability and technicality of the vehicles currently in use. "There is no need for major adjustments. As for Toyota, all shipments over the last decade come equipped with this dual capability."

The UAE has offered the option of unleaded fuel since the mid-1990s, largely in response to automobile industry requests. Among the other Gulf states, Bahrain started offering unleaded fuel last September. Kuwait did so in late 1999 and Qatar last July. Saudi Arabia has passed a law requiring all imported vehicles from model year 2002 to operate on unleaded fuel only.

"With the level of travel via road, it makes sense only if all the Gulf states work in tandem and ensure availability of unleaded fuel across their individual markets," said Kersie Polad, managing director of Al Yousuf Motors, the dealership for Chevrolet, Daewoo and Daihatsu. "As for the UAE, the new regulations should be across the board and cover imports of used cars. And it should be clear whether the regulations cover commercial vehicles as well. If not, there should be laws on commercial vehicles."