New Zealand ethanol switch could cost government

A mass switch by fuel retailers to ethanol-blended petrol could cost the New Zealand government millions of dollars.

One retailer, Z Energy, is considering making the switch and if other major retailers follow suit it could cost the government around NZ$180 million (€115.3 million). Ethanol-blended petrol currently receives a tax exemption of $0.60 a litre.

Z Energy CEO Mike Bennetts as been quoted as saying the company could save around $60 million a year by making the switch.

The company is also considering investing $40 million into a new bulk storage facility but say the money would come out of its own operating cashflow.