20 June 2016
The Independent Pricing and Regulatory Tribunal (IPART) is 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.
In December 2015, the NSW Government announced a range of measures to improve the state’s performance against the 6% ethanol mandate imposed on major fuel sellers. These include amending the Biofuels Act 2007 (NSW) to extend the mandate to a wider range of service stations and provide for IPART to regulate the wholesale price of ethanol.
IPART Chairman Dr Peter Boxall said a combination of looking at the efficient costs of producing ethanol, and the discount required to make E10 more attractive to consumers in place of regular and premium fuels, would be considered.
Ethanol is mostly sold as E10, a petrol-ethanol blend that includes up to 10% ethanol and is a substitute for unleaded petrol.
“About 85% of registered vehicles in NSW are technically capable of using ethanol-blended fuels, but it accounts for 26% of petrol sold in NSW, and around 10% nationally,” Dr Boxall said.
Dr Boxall said the price set needs to be high enough to encourage producers to manufacture ethanol, and wholesalers and retailers to supply it to customers, but low enough to make it attractive for motorists.
“The costs of ethanol production are impacted by the cost of the feedstocks used in its production such as wheat, molasses or sorghum. The additional costs associated with storing and blending E10 also need to be considered.” Dr Boxall said.
A paper released by IPART today seeks feedback on a range of issues to be considered as part of the review. Submissions on the Issues Paper will be received until 18 July and considered by IPART before a draft report is released in September. Final recommendations on the maximum price will be made in December 2016.
A full copy of the Issues Paper is available here.
Media Contact: Julie Sheather 02 9290 8403 or 0409 514 643