No ethanol mandate

Oil companies have been spared from being forced to mix ethanol with their petrol supplies.

Deputy Prime Minister and Nationals leader Mark Vaile told Liberal and National backbenchers that more information was needed before a mandated level of ethanol would be considered.

There is growing pressure from the Nationals backbench, led by NSW senator Fiona Nash, to mandate the use of ethanol, which is derived from either grain or sugarcane. With petrol prices at all-time highs, ethanol-laced fuel is up to four cents a litre cheaper.

Vaile told the party room that the price difference was the best way to encourage motorists to use ethanol, rather than forcing it on them. While leaving open the door to an ethanol mandate, Vaile said the results of a study to be completed in the next two months on how much ethanol is being used across the country would be pivotal in any decision.

That study marks six months since an industry roundtable at which oil companies pledged to make greater use of ethanol. However, it appears the big four oil companies have so far dragged their feet, with independent petrol retailers more likely to offer ethanol-laced fuel.

Vaile said any decision on an ethanol mandate had to be made based on facts on the use of ethanol. He said in the town of Taree in his own NSW mid north coast electorate of Lyne, ethanol-laced fuel was two cents a litre cheaper than ordinary fuel. In the NSW central western town of Young, ethanol fuel was three cents a litre cheaper.

Senator Nash said waiting until the results of the study were completed made sense. But she warned that if there were no signs that oil companies were ramping up ethanol usage, then a mandate was on the cards.