Divided opinions on ethanol as an answer to the oil shock
Australia’s petrol and diesel taxes are already among the lowest in the world, which could limit efforts to curb price spikes and prompt some to offer ethanol as an option.
Biodiesel, bioethanol and biocrude blends can be used as alternatives, with ethanol being the most widely used biofuel in the world, according to the industry.
A bio-based petrol mandate in Queensland already requires that a minimum of four per cent of all sales of regular unleaded petrol and ethanol-blended petrol (E10 and E85) by fuel retailers be ethanol.
The NSW government has also introduced a petrol-ethanol blend requirement for service stations.
But the federal government does not support any move towards a broader ethanol mandate for all Australian fuel types, saying it would likely increase petrol prices for motorists and industry.
“This is due to the need for ethanol-compatible infrastructure throughout the supply chain, which would involve significant capital investment in new infrastructure, such as additional storage tanks and cisterns ready for use. ethanol,” a spokesman for Energy Minister Angus Taylor told AAP. Tuesday.
Nor is the federal government immediately backing calls by Liberal prime ministers Dominic Perrottet, Steven Marshall and Peter Gutwein for cuts to the 44-cent-a-litre fuel excise tax.
In New Zealand, excise duties on petrol and road charges were reduced for three months overnight to relieve households.
Petrol prices on the other side of the divide had already topped NZ$3 (A$2.81) a liter and threatened to climb to NZ$4.
The Morrison government says Australian state governments could reduce vehicle registration fees.
Consumer watchdog chairman Rod Sims said the world is already experiencing high crude oil prices and shocking events in Ukraine have pushed prices even higher as Russia is a major supplier.
The Australian Competition and Consumer Commission’s latest price report found daily average retail petrol prices hit eight-year highs in the five largest cities in February.
Australia is one of the lowest-taxed countries for petrol and diesel, maintaining its prices among the lowest of developed economies, according to OECD data.
In the December 2021 quarter, this tax component — made up of the GST and flat rate excise — accounted for 36% of the average retail price of gasoline, according to the ACCC.
Gasoline prices have since topped $2 per litre.
NRMA spokesman Peter Khoury said fuel excise duty should be collected from motorists and returned to the road network.
“It’s not meant to be leverage that you pull when prices go up.”
Oil shocks often lead to calls to mandate the blending of locally produced ethanol with gasoline.
The Howard-era biofuels task force found that new ethanol subsidies were not warranted because there were cheaper ways to reduce greenhouse gas emissions.
The last time petrol prices were this high in Australia was in June 2008, when average daily prices hit 212.9 cents per liter in today’s dollars, data from the ‘ACCC.
Echoing his father Bob Katter’s plea for biofuels, Queensland MP Robbie Katter said Australian-made ethanol is the “greatest tool” to compete with big oil.
Nationally, ethanol blends accounted for about 12% of gasoline sold last year, with the low market share attributed to a price differential of just pennies and consumer distrust of the fuel. respect to alternative fuel.
Current federal government efforts are focused on liquid hydrogen as a future fuel, after a 2019 fuel safety review found the economy will depend on liquid fuel for decades, especially diesel and gasoline. jet fuel.
Ethanol is primarily made from wheat and sugar cane in Australia, and corn starch in the United States.
“You’re just realigning your food crops with your fuel,” said Australian Institute energy expert Richard Merzian.
“There’s a much more popular and commercially viable alternative ahead of us and that’s the electrification of transportation and making that fuel in our backyards.”