Alicia Wood, 18 December 2015

ALL service stations will be forced to stock ethanol fuel despite industry warnings it will push petrol prices up by 8c litre after the NSW government approved the controversial plan.

Cabinet yesterday signed off on a full retail compliance plan to make all stations sell the fuel in order to reach the state’s ethanol mandate.

It is understood the final proposal includes price controls to prevent wholesale price rises, and small business owners will be given a “transition period” before having to convert their tanks.

A government source said this would ensure that motorists were not slugged any extra at the bowser.

The mandate requires oil companies to ensure 6 per cent of fuel sold was ethanol. It currently only makes up 2.5 per cent of sales. Manildra, the only ethanol producer in NSW, will be the big winner from the proposal put forward by Better Regulation Minister Victor Dominello.

The company employs 1600 people — the majority in regional NSW — and is also one of the biggest political donors in Australia, giving $395,000 to the Nationals, $532,000 to the Liberal Party and $414,000 to the Labor Party between 2010 and 2014.

The National Party were key backers of the plan, arguing it would boost regional jobs.

The Labor Party was also likely to support the changes, with Opposition Leader Luke Foley saying: “The government needs to release a comprehensive plan to support the ethanol industry.”

But the proposal is set to cause chaos within Liberal Party ranks, as economically conservative members see it as an unnecessary interference in the market.

The Australasian Convenience and Petroleum Marketers Association have also slammed the idea, saying it could cost small businesses up to $900,000 to comply.

Small business owners Michael and Christine Robinson, who have run the Lanitza service station south of Grafton for 12 years, said the policy could force them on to the dole.

Mr Robinson, 55, said he used to stock ethanol but “no one bought it”.

“If we’re forced to do this we’ll be closing. We’ll never make that money back,” he said. “We are making 4-5c a litre — in the good times.

“If (Premier Mike Baird) wants two more people on welfare, go and do it. We’d have no other option, game over. I don’t know where these people get off. How can they force you what to sell in your shop?”

Extracted in full from the Daily Telegraph.