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ACF?s Sustainable Australia program manager Alison Cleary... said the introduction of mandatory fuel standards would reduce emissions and save Australian motorists money.

?With petrol nudging A$1.50 a litre, a fuel efficiency standard of 6.8L/100km would save the average Australian driver around A$1,000 on petrol each year.?

The previous Federal Government had a voluntary agreement with the car industry for vehicles manufactured in Australia to achieve an average fuel efficiency of 6.8L/100km by 2010. But almost no progress has been made towards that target, with only one Australian manufactured car model having an efficiency of less than 10L/100km in 2006. The auto industry failed to meet similar non-binding efficiency targets in 1983, 1987 and 2000.

?Mandatory efficiency standards for new cars are needed to help Australians cope with higher oil prices and ensure we remain competitive in international and domestic markets,? Ms Cleary said.

Raising [fuel efficiency] standards would impose costs on both the producers and buyers of passenger vehicles. To comply, producers would need to incorporate technologies to boost the fuel economy of their vehicles, which would increase their cost of production. Consumers would face higher prices for new cars and trucks. But consumers would also see lower operating costs for new vehicles because they would use less gasoline, offsetting some of the sting of the higher purchase prices.

CBO estimates that raising [fuel] standards by ... enough to reduce the amount of gasoline consumed by new vehicles by 10 percent would cost the U.S. economy a total of $3.6 billion per year.

That figure translates to about $230 per new vehicle. Consumers would most likely bear about two-thirds of the costs. Although the average price of a new passenger vehicle would go up by nearly $900, fuel savings would lower the additional costs to consumers to roughly $150 per vehicle, on average. Automakers' lost profits would constitute the remaining $80.