The Australian Lot Feeders' Association has complained to the Australian Competition and Consumer Commission that consumers are being misled at the bowser about ethanol's fuel economy rates compared to conventional petrol.
ALFA has requested the ACCC take action over the point of sale material, claiming ethanol's fuel efficiency is actually inferior to petrol.
"Consumers are currently being misled by a lack of point of purchase information, along with ethanol prices, which do not reflect its lower energy and hence inferior fuel economy rates compared to conventional petrol," ALFA vice president Jim Cudmore said.
"This we believe arguably breaches the misleading and deceptive conduct provisions of the Trade Practices Act.
"CSIRO research has demonstrated that ethanol has 34pc less energy than conventional petrol and therefore more ethanol is required to drive the same number of kilometres.
"If motorists are to be compensated for this poorer fuel consumption then it is estimated that a 10pc ethanol to fuel blend (ie E10) would need to be priced at 2-3pc(around 4 cents/ litre) less than conventional petrol.
"However, E10 blended fuel is almost never priced less at this discount as evidenced by NRMA's petrol watch scheme."
ALFA has been a vocal opponent of government support for the ethanol industry, claiming ethanol production takes grain away from the feedlot sector, with the added demand also contributing to higher grain and food prices.
It says the ethanol industry receives around $95 million a year in State and Federal Government assistance, including the provision of up to $20,000 for each service station to provide the product and discount it to consumers.
"Given this preferential Government assistance over conventional fuel production, ALFA believes that there is no reason why consumers cannot be informed about the inferior fuel economy of ethanol and have the product priced accordingly in the market place," Mr Cudmore said.
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