Higher Sulphur Petrol Stays Legal Until 2027 as Lytton Upgrade Slips

Last December, Australia finally caught up with Europe on clean petrol. Every grade at every servo was capped at 10 parts per million of sulphur. Right now the legal ceiling is four times that, and on the last day of September Canberra decided it will stay that way until 30 June 2027.

Most drivers missed it. Here's what's really going on.

Two emergency rules that refused to expire

Back in March, with Iran blockading the Strait of Hormuz and panic buying doubling fuel demand, Energy Minister Chris Bowen made two temporary changes to Australia's fuel standards.

The first, on 12 March, lifted the sulphur limit in petrol so that higher sulphur fuel from Ampol's Lytton refinery in Brisbane could be sold here instead of shipped overseas. The ABC reported it added about 100 million litres a month to local supply, roughly two days' worth. The second, on 24 March, lowered the minimum flash point for diesel from 61.5°C to 60.5°C.

Both were due to wind back from 1 October, when petrol would step down to 40ppm on its way back to 10ppm in January and diesel would return to 61.5°C. A news report on 29 September told diesel users exactly that.

It didn't happen. On 30 September the government extended both measures to 30 June 2027, citing "ongoing disruption in global oil markets", according to the federal energy department. The 50ppm limit ended on schedule, but 40ppm and the lower diesel flash point now run for another nine months.

Monday's update filled in the gap

Ampol's quarterly update on Monday goes a long way to explaining why. The company now expects its ultra low sulphur fuels project at Lytton to be commissioned in the first quarter of 2027. When it reported its 2025 results, commissioning was due to start in the second quarter of this year. Until that equipment is running, Lytton's ability to make 10ppm petrol is limited. Market reports on Ampol's 2025 results said it had been exporting petrol that didn't meet the new rule since October 2025, at an estimated cost of about $7.5 million a month.

At the same refinery, an inspection of the fluidised catalytic cracking unit, the part of the plant that breaks heavy oil down into petrol and diesel components, found more work was needed. The unit is now expected back in mid November, and Ampol expects to make about 150 million fewer litres of petrol, diesel and jet fuel this quarter than it had forecast. Lytton's output was already down 9.2% on a year earlier in the September quarter, though Ampol says customer supply isn't expected to be affected.

Down in Corio, Viva Energy's Geelong refinery has finished a roughly $400 million upgrade aimed partly at 10ppm fuel, with much of the funding from government, according to the ABC. Fair to say one of our two remaining refineries has done the work for the clean petrol rule and the other hasn't, and the June 2027 end date gives Lytton a few months of breathing room.

Right back where we started

Here's the fascinating backstory. In 2019 the government legislated a 10ppm limit for all petrol from 1 July 2027. In 2021, as BP closed its refinery at Kwinana Beach and ExxonMobil announced it would shut Altona, Canberra struck a support deal with the two survivors that included money for low sulphur upgrades, and the deadline was pulled forward to December 2024. It later slipped to 15 December 2025 to avoid compromising fuel security, CarExpert reported.

Under the extension, the full 10ppm limit returns everywhere on 1 July 2027. That's the exact date written into the 2019 law. Seven years of bringing it forward and pushing it back, and we've landed on the original date.

To put the numbers in perspective, for most of the past decade regular unleaded could legally carry 150ppm of sulphur and premium 50ppm. A 2018 government impact statement found actual averages for 2014 to 2016 sat around 60ppm for regular and 27ppm for premium. Diesel has been held to 10ppm since 2009. Europe got its petrol down to 10ppm that same year, and the US, Japan and China all run 10ppm standards.

So is it hurting your car?

Probably not. The department says average sulphur levels across Australia have stayed below 10ppm throughout the temporary rules, with only one region slightly above. The 40ppm figure is a legal maximum, and it's still well under the old 150ppm ceiling.

Sulphur does matter over time. When it burns it forms oxides that can combine with water vapour to make acid, and it can wear on catalytic converters and oxygen sensors. Peter Jones from the Victorian Automotive Chamber of Commerce told CarExpert "you're unlikely to notice an immediate issue", but added that "prolonged use isn't ideal for vehicle performance or longevity." There's a health angle too: Tristan Edis of Green Energy Markets told the ABC in March that more sulphur means more problems with asthma and a higher risk of heart trouble.

The cars with the most at stake are the newest ones. Euro 6d emissions rules apply to new light vehicle models launched since December 2025 and will cover every new light vehicle from July 2028. Those emissions systems are designed around ultra low sulphur, low aromatics petrol.

The diesel tweak in plain English

Flash point is the lowest temperature at which a fuel's vapour can ignite. Australia's diesel minimum of 61.5°C is among the highest in the world, the ABC reported, while Europe's is 55°C. Dropping ours by a single degree lets refiners blend in more jet fuel fractions and widens the pool of overseas diesel we can import. It doesn't change how diesel is classified under the Australian Dangerous Goods Code, and Ampol says it won't affect engine performance or emissions.

That flexibility matters right now. Grain growers around towns like Horsham are heading into harvest, and a Victorian grower told the ABC in September that diesel prices were about double what they paid 12 months earlier. "When international supply becomes constrained, having access to the widest practical pool of compliant diesel matters," the Australian Logistics Council's Hermione Parsons said in late September.

What it means at the bowser

The extension won't show up as a price cut on the board. Its job is keeping litres in the country, which the department says helps stabilise prices. As at 13 October, Australia held 41 days of petrol under the minimum stockholding rules, up from a March quarter average of 37, along with 33 days of diesel. The number of tankers carrying refined fuel towards Australia fell from 45 to 42 in the week to 16 October, and Al Jazeera reported on 14 October that attacks on shipping around Hormuz had surged again. With Lytton running short until mid November, every compliant litre counts.

The national average for unleaded petrol was 242.1 cents in the week to 18 October, up 1.6 cents, according to the Australian Institute of Petroleum. Wholesale prices fell every day that week, with Sydney's terminal gate price sliding from 242.0 to 235.5 cents. Our price trends page will show whether the bowser follows.

One more thing most people don't realise. Under the old rules premium petrol had a third of regular's sulphur ceiling. Now every grade shares the same cap. If your car runs happily on regular, premium 95 or premium 98 no longer buys you a lower sulphur limit.

The short version

Fuel standards rarely make the evening news, yet they decide what goes into every tank in the country. The date worth circling is 1 July 2027, when the clean petrol promise made in 2019 finally falls due.