Sean Nicholls, 15 March 2016

Liberal MLC Peter Phelps “went berserk” during a partyroom meeting and vowed to not support legislation to force small petrol retailers to sell an ethanol blend.

Opponents of the legislation say it will drive up petrol prices by as much as 8¢ a litre.

Mr Phelps – a self-styled libertarian – upbraided the minister with carriage of the legislation, Victor Dominello, during the meeting on Tuesday.

“He went berserk,” a source said.

Mr Phelps told the minister it was “illiberal” to force companies to sell a product that “people don’t want”, according to the source.

He detailed Mr Dominello’s publicly available diary summaries, which show he has met with ethanol producer Manildra five times as Minister for Better Regulation.

The NSW Greens have previously pointed out that Australia’s largest ethanol producer, Manildra, has donated $4.3 million to the Liberals, Nationals and Labor since 1998.

Mr Phelps then told the partyroom he would not be supporting the legislation when it came into the upper house, the source said. Mr Phelps declined to comment.

In NSW, the law says major retailers must try to ensure ethanol accounts for 6 per cent of all petrol sold, via the E10 blend. Retailers with fewer than 20 sites are exempt.

But ethanol accounts for only about two per cent of all petrol sold in NSW.

The government’s legislation is expected to require smaller retailers which sell three or more types of automotive fuel to sell E10 for the first time to reach the 6 per cent mandate.

Mr Dominello has said there will be exemptions and it is understood the changes are not targeting “mum and dad” petrol station owners, but smaller operators who might sell large volumes.

But the Australasian Convenience and Petroleum Marketers Association (ACPMA) warns small retailers will be forced to increase the price over three years to recoup the cost of upgrades.

They say this could drive up the price of petrol by as much as 8¢ a litre.

Mr Dominello has said the changes are aimed at “creating a competitive biofuels industry in which E10 is a cheap and attractive option for motorists, while maintaining choice among other regular and premium unleaded fuels”.

A draft bill has been circulated among stakeholders and legislation is expected to be introduced to parliament this week.

On Tuesday ACPMA chief executive Mark McKenzie told Fairfax Media his association was “working cooperatively with the process.”

“But we remain very concerned about the potential impact on small fuel retailers and the consequent pass through to motorists in the form of higher fuel prices,” he said.

Extracted in full from the Sydney Morning Herald.