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Australian family-owned oil company Gull Petroleum expects to have more than a third of its 30 service stations supplying a 10 per cent biofuel blend before the end of this month.
The company, which says it has made about 50,000 forecourt biofuel sales since introducing the high-octane blend to some petrol pumps in August, is now providing it at eight North Island stations after extending its supply line in the past two days to Whakatane and to New Lynn in Auckland.
It intends adding another station at Albany to its biofuel network today, and two more Auckland outlets by the end of the month, in Henderson and East Tamaki.
That will make biofuel available at 11 Gull stations, all in Auckland, except for one outlet each in Whakatane and Hamilton.
But Gull New Zealand general manager Dave Bodger said the company expected to roll out its blend, which it believed provided a cleaner engine as well as a better environment from "significantly lower emissions", to most of its other stations in coming months.
He said the 98-octane biofuel - of 10 per cent ethanol from the dairy industry blended with petrol - already represented about 20 per cent of sales at those outlets where it was available.
As the company had expected, and despite a warning by car-makers that second-hand Japanese imports could not be guaranteed suitable for fuel with more than 3 per cent ethanol, he said none of his customers had reported any adverse effects such as leaking seals.
Toyota issued a warning on the day Prime Minister Helen Clark launched Gull's product that none of its used imports registered before 2005 were suited to it, and that deteriorating fuel lines could cause leaks into engines, possibly setting them on fire.
Mr Bodger acknowledged that most older cars were rated to run on 91-octane petrol rather than the higher octane of his biofuel blend.
But the Government is preparing to seek proposals from independent laboratories for a testing regime to confirm the belief of officials that blends with up to 10 per cent ethanol will not damage fuel systems.
Ministry of Transport environment and safety general manager David Crawford said he would have no hesitation about running a second-hand imported car on such a blend. Mr Crawford said no tests in countries where biofuels were used had raised any engine safety issues.
Even so, the Government was "about to do some work to confirm our already strongly held view."
Energy Efficiency and Conservation Authority senior adviser Elizabeth Yeoman said that although Japanese vehicle manufacturers had yet to give a written undertaking they would accept the findings of independent tests, the exercise should give New Zealand motorists peace of mind about using biofuels with corrosion inhibitors.
Mr Crawford said he wanted to get as much of the testing exercise completed before the Government introduced a mandatory sales target for biofuels across the oil industry next year.
Although the requirement was to have begun from the passage of the Biofuel Bill at 0.53 per cent of petrol and diesel sales, rising to 3.4 per cent by 2012, Energy Minister David Parker has indicated the possibility of a delay until July 1 to allow oil companies more planning certainty.
Although it is up to the companies to determine how to fulfil their obligations, whether through bioethanol blends with petrol or through biodiesel, Gull is the only supplier to have shown its hand.
BP spokeswoman Diana Stretch said her company had every intention of meeting its obligations, but it would have to obtain considerably higher volumes of biofuel feedstock than Gull, so was still working out its strategy.
