THE Australian Lot Feeders’ Association says that while the NSW Government's decision to dump the proposed phase out of regular unleaded petrol from July this year is the right one, the retention of the current 6pc ethanol mandate will still effectively deliver the same result.
ALFA president Jim Cudmore said in a statement that given the current 6pc ethanol mandate requires 60pc of all NSW petrol sales to be E10 and that premium unleaded currently comprises 40pc of petrol sales, regular unleaded will still effectively be phased out under the current ethanol policy.
“The reason why it hasn’t been phased out already is that petroleum companies are unable to meet the ethanol supply requirements under the past 4pc mandate let alone the current 6pc policy,” Mr Cudmore said.
“Accordingly, consumers will pay higher fuel prices as regular unleaded becomes less available.”
Mr Cudmore said ALFA had always taken an active stance in opposing ethanol mandates, and its concerns were shared by a plethora of disparate groups who joined an alliance to advocate against their implementation.
“It is not just the big oil companies that are opposed to ethanol mandates but almost every representative body for farmers, service stations, motoring and marine groups, fuel distributors, consumers, welfare bodies, environmentalists, stock feed manufacturers, intensive livestock industries and even biofuels,” Mr Cudmore said.
“With the majority of ethanol for the NSW mandate derived from grain, ALFA has always been concerned that during low grain production years, the artificial and inflexible demand created by the mandate would inflate grain and hence food prices. If regular unleaded is phased out, a repeat of the 2002-03 drought for instance will lead to 23pc of the states average grain crop being diverted to ethanol, meaning that the cost of bread, beef, dairy, pork, poultry and eggs will rise.
“Ethanol mandates increase fuel prices, as 30pc of cars, 70pc of motorbikes and all marine, mower, whipper snipper, leaf blowers and other small engines are not compatible with ethanol, forcing owners to pay up to 12c/litre more for premium unleaded petrol.
“Motorists with E10 compatible vehicles are also worse off as it needs to be at priced at least 3.5c/litre less than regular unleaded petrol in order to offset its poorer fuel economy. In 2011 the ACCC determined that the average price differential was only 1.7c/litre.”
Mr Cudmore said that every other Government in Australia has rejected or removed an ethanol mandate policy due to the costs and risks outweighing any purported benefit.
“With almost every affected stakeholder group opposed to ethanol mandates, one question’s why the NSW Government does not drop the policy completely,” Mr Cudmore said.
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