Diesel and Petrol Standards Tightened on 1 October. What Changed

Nobody filling up on Thursday morning would have noticed a thing. Same nozzle, same price board, same queue behind someone hunting for their loyalty card. But on 1 October, two of the emergency fuel rules brought in back in March expired or stepped down, and between them they say a fair bit about where Australia's fuel supply sits heading into summer.

The first change is to diesel. From 1 October, all diesel sold in Australia must again have a minimum flash point of 61.5°C, up from the temporary 60.5°C allowed since late March. The second is to petrol. The sulfur cap, relaxed to 50 parts per million (ppm) for every grade during the supply crunch, has dropped to 40ppm and returns to the 10ppm standard on 1 January 2027.

Neither change will make your car run any differently. The reasons behind them, and the timing, are another matter.

One degree that mattered

Flash point is the lowest temperature at which vapour coming off a fuel can ignite if there's a spark or flame nearby. It's a safety measure, not a performance one. It tells you nothing about how much power your engine makes or how far a tank will take you.

In late March, with diesel running dry at hundreds of servos (the ABC counted 164 sites without diesel in NSW alone, and 55 in Queensland), Energy Minister Chris Bowen announced the flash point would drop by a single degree for six months. That sounds trivial. It wasn't.

What most people don't realise is how unusual Australia's diesel standard is. At 61.5°C it's one of the highest minimum flash points in the world, according to the ABC. Europe's minimum sits at 55°C, and the United States and Canada also accept diesel with lower flash points than ours. So a lot of perfectly good diesel made overseas simply couldn't be sold here, and our own refiners had to leave some lighter molecules out of the diesel they made.

Lowering the bar by one degree helped on two fronts. Importers could buy from a wider pool of refineries, including in North America and Europe. And the country's two remaining refineries, Ampol's at Lytton in Brisbane and Viva Energy's at Geelong, could blend more of their jet fuel fractions into diesel. Ampol said at the time the move would "maximise the yield of crude oil in the refining of diesel".

Why 61.5 and not 55?

Here's the fascinating backstory. Dangerous goods rules split liquids into flammable and combustible at a flash point of 60°C. Petrol sits far below that line. Diesel sits above it, so it's treated as a combustible liquid, which is why it's stored and moved under less demanding rules than petrol.

Australia's 61.5°C minimum keeps diesel a little above that line. Even the temporary 60.5°C figure stayed on the right side, which is why the government stressed the change did not alter how diesel is classified under the Australian Dangerous Goods Code and needed no changes to storage or handling.

It wasn't the first time, either. The same lever was pulled in 2020 during the COVID supply disruptions, and the government says there was no adverse impact on engines or emissions then.

The sulfur step nobody's talking about

The petrol change has had even less attention, which is odd given the fuss it caused in March.

Australia only moved all petrol grades to a 10ppm sulfur limit on 15 December 2025. Three months later, with supply strained by the conflict in the Middle East, the government let higher sulfur petrol back in. Under the revised schedule, all grades could carry up to 50ppm until 30 September. From 1 October the cap is 40ppm, and from 1 January 2027 it's back to 10ppm. (We covered the original reversal back in March.)

To put this in perspective, regular unleaded was legally allowed up to 150ppm for most of the past decade, and premium up to 50ppm, according to CarExpert. So even the relaxed cap is no worse than what most Australians burned for years. As NRMA spokesperson Peter Khoury put it in March, "It's the same fuel we were buying 12 months ago and beyond."

The catch is longer term. Higher sulfur can reduce the effectiveness of catalytic converters and particulate filters over time, according to the NRMA. Europe, China and New Zealand were all on 10ppm before Australia, and many newer engines and emissions systems are designed around it.

What it means at the bowser

The honest answer: neither change comes with a price you can point to on the board.

What they do is narrow the margin for error. Going back to 61.5°C shrinks the pool of diesel Australia can import again, just as demand ramps up for the grain harvest and the summer holidays. Australian Logistics Council chief executive Dr Hermione Parsons urged caution this week, saying "There is still good reason to be cautious about Australia's diesel position." Monash University's Associate Professor Stuart Walsh has noted that Australia is the world's largest consumer of internationally traded diesel in absolute terms. By most estimates, 85 to 90 per cent of the petrol, diesel and jet fuel we use is refined overseas, mostly in Singapore, South Korea, Japan and Malaysia.

And diesel has been the expensive one. Across the prices reported to the state and territory government fuel schemes that Petrolmate tracks, the national average for diesel has climbed from about 239 cents a litre in the last week of July to around 288 cents this week. Unleaded went from about 202 to 242 cents over the same stretch. Part of that is the end of the excise cut on 3 August, which added 16 cents a litre at the wholesale level. The rest has come from international benchmark prices, which the ACCC's weekly update of 2 October describes as still "relatively high".

The gap between the two fuels has widened as well. Diesel sat about 37 cents above unleaded in late July. It's now about 46 cents. Over the past 48 hours, average diesel prices ranged from about 282 cents in Queensland to 290 cents in the ACT, with the Northern Territory the outlier near 317 cents.

There is a little good news. The ACCC found capital city prices for both fuels eased slightly last week, and our numbers agree: diesel is down about 2 cents on the previous week and unleaded petrol prices are down about 4.

The bigger picture

These two changes are the government unwinding its emergency settings one at a time. Not every lever is being released, though. On 19 September the reduced minimum stockholding obligation was extended to 31 January 2027, letting suppliers hold 20 per cent less fuel in reserve if they push more into the domestic market.

So Canberra is tightening fuel quality while keeping the supply buffer loose through the busy season. That's a reasonable bet that the worst of the import crunch has passed. It's still a bet, and anyone who drives a diesel ute, runs a farm or relies on freight will find out over summer whether it pays off.

What to keep in mind

Fuel standards rarely make the evening news, but this one degree change is a decent barometer. The government thinks the diesel market is steady enough to go back to the old rules. Whether summer agrees is the thing to watch.