Alicia Wood, 14 December 2015

A CONTROVERSIAL plan that could bump up the price of petrol by up to 8c a litre, by forcing all service stations to sell ethanol, will be signed off by the government this week.

Cabinet will this week consider Better Regulation Minister Victor Dominello’s proposal to force all petrol stations to install an ethanol pump to meet the NSW mandate, under which 6 per cent of fuel sold by oil companies must be ethanol.

The retail compliance plan is fiercely backed by the ­Nationals and a majority of Liberals, because it boosts regional jobs.

The proposal is also expected to sail through parliament because Opposition Leader Luke Foley also supports the mandate.

“The ethanol mandate ­exists for good reasons but the ethanol industry has been going backwards since this government came to office,” he said. “Ethanol sales are meant to account for 6 per cent of all petrol sales but it is now under 2.5 per cent.”

But industry sources say the plan comes at a big cost to small business and consumers.

Of 1978 service stations in NSW, 904 do not sell E10 — all of them small businesses.

Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie said it will cost those small business owners more than $900,000 to convert tanks and pumps and they would have to lift all petrol prices by 8c a litre over a three-year period to recoup costs, with other stations then matching the price rises or following close behind.

Based on ACAPMA data of the average motorists’ fuel usage­ and an average fuel cost today of 150.6c a litre, an 8c rise would cost the average motorist $154 more each year.

“Our industry has been thrown under the bus,” Mr McKenzie said. “This is an industry that employs 55,000 people nationally and generates $75 billion. NSW is 34 per cent of that market.”

Government MPs have privately­ expressed concern that the ethanol mandate benefits­ just one company — Manildra, the only ethanol producer in NSW, which is also one of the biggest political donors in Australia.

Between 2010 and 2014, it gave $395,000 to the Nationals, $532,000 to the Liberal Party and $414,000 to the Labor Party.

Extracted in full from the Daily Telegraph.