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Pioneering biofuel supplier Gull Petroleum is lashing out at bigger oil companies for warning of dire consequences from making mandatory sales targets too ambitious.
BP and Mobil warned a parliamentary select committee last week of high compliance costs from having to install duplicate storage tanks and blending facilities at up to nine oil terminals throughout the country.
After higher product costs, motorists could end up paying 7c to 15c more a litre for fuel, BP indicated in a submission on legislation requiring biofuels to account for 3.4 per cent of sales by energy content by 2012, in stages starting this July.
But Gull, which has been selling a 10 per cent ethanol-petrol blend since August at up to 12 service stations, says its rivals are "crying wolf".
General manager Dave Bodger said Gull was selling environmentally friendlier 98-octane biofuel to motorists for less than the same grade of pure petrol available from competitors.
Mr Bodger said the fact that Gull was filling more than 10,000 vehicles a month with its ethanol blend also showed that claims about the unsuitability of biofuels for many vehicle engines were wearing thin.
BP says the lower energy content of ethanol compared with petrol means "neat" biofuel will by 2012 have to account for 5 per cent of the two billion litres it sells annually.
That means almost 90 per cent of 91-octane petrol will have to contain 10 per cent ethanol, and 30 per cent of diesel must be blended with 5 per cent biofuel such as tallow.
BP warns of petrol price rises over the next 18 months of at least 35c a litre from a combination of biofuels (7c), new carbon dioxide emission charges (8.5c), higher ACC levies (2c), excise increases (4c), a new regional fuel tax (10c) and GST increases on all of these (4c).
