Joe Aston

This is so out of character for the country’s best and truest politician, but NSW Premier Mike Baird is apparently blind to one simple fact: his government’s insistence on broadening the state’s ethanol mandate is a path of utter folly and, indeed, borderline villainy.

Having asked his pricing regulator (IPART) to review the efficacy of the mandate, and receiving IPART’s damning verdict of it (despite a vain attempt to water its findings down by tweaking the original terms of reference), Baird has proceeded with plans to force all service stations (no matter how small or remote) to dig up their tanks and convert to selling an environmentally and economically deficient blend of petroleum that drivers don’t even want to buy. The plan’s sole beneficiary (according to NSW Treasury, no less) is the state’s monopoly ethanol producer, Manildra Group, which is a big donor to the Liberal and National parties. It’s dead set scandalous.

And on Monday, IPART (not, tellingly, Baird or his minister Victor Dominello) announced it was now “seeking feedback on how wholesale ethanol used in ethanol-blended fuels should be priced to supply E10 at service stations at a price attractive to customers”. That’s right, the regulator is trying to figure out how to make the product’s supply chain economics viable after Baird has already introduced legislation to make the product mandatory. It’s unbelievable.

Free feedback for IPART
Here’s some free feedback for IPART: only a ridiculous discount will make drivers put that crap in their tanks. Since servos removed regular unleaded pumps altogether to try to meet their mandated ethanol sales targets, NSW has more than doubled the national consumption of premium unleaded – meaning punters would rather pay extra than buy E10.

And while Dominello has consistently claimed that E10 is or can be 8¢ per litre cheaper than regular petrol, in reality it sells for 2¢ per litre cheaper than regular unleaded. Being less fuel efficient, it’s a dumb buy even before you consider the epic rort that got it to the nozzle.

IPART chairman Peter Boxall now says ethanol’s price in the NSW market (not that there exists another market distorted enough to trade it), of one producer (that Coalition donor), which he alone regulates, “needs to be high enough to encourage” its manufacture and its subsequent (non) demand in automotive petrol. But given everything IPART has already told us about the gunk, er, why?