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Biofuels accused of raising petrol prices in Queensland, Australia

A key economic advisor to Australia’s federal government has claimed motorists in Queensland are paying more for petrol because of the state government’s biofuel mandate.

The Productivity Commission has urged Queensland, New South Wales and the Commonwealth governments to stop supporting the biofuels industry by the end of next year. It’s also dismissed claims from Queensland’s government that its biofuel mandate has created jobs.

Queensland’s ­Liquid Fuel Supply Act declares that service stations selling 500,000 litres of petrol each calendar quarter, or those owning 10 or more sites, must sell at least ­­3% bio-based petrol. That figure will increase to 4% in July next year.

In January 2017, Queensland Energy and Biofuels Minister Mark Bailey said the use of biofuels would help create jobs in regional Queensland. “By attracting investment to the state’s biofuels and bio-manufacturing industry, we’re creating jobs for regional Queenslanders”.

The Productivity Commission’s report claims support of biodiesel and bioethanol is increasing fuel costs. The authors also question the environmental benefits of using biofuels.

Motorists in Queensland pay more for petrol than those in the southern states of Australia, a fact the Productivity Commission attributes to the support of biofuels.

“The commission considers that farmers and the community would benefit from the ­removal of ethanol mandates and excise arrangements, as these policies deliver negligible environmental benefits and come at a high cost.” The authors write in their report titled: Regulation of Australian Agriculture.





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