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Government's 'extraordinary' decision on ethanol.

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Government’s ‘extraordinary’ decision on ethanol 23 September, 2005

Member for Kennedy Bob Katter said the Government’s decision not to mandate ethanol can only be described as extraordinary. He said, as with Free Trade, the Government marches on a pathetic belief they are the only country in step. The opposite is true.

“China and India are currently building plants whilst Japan is negotiating with Brazil this very week. All the Australian Government has done is let off hot air,” Mr Katter said.

He said last month the United States President mandated 5% ethanol by 2012 (7.5b gals). He said the EU Transport Energy Council has formally recommended 7% - E7 over eight years whilst Brazil is already on E25.

Mr Katter said the Federal Government cannot hold out forever against the global conversion to ethanol. He said the spike in petrol prices had given ethanol an edge. He said drivers in parts of the US State of Minnesota are paying around US$1.59 for a gallon of E85 (85% ethanol) compared to $1.99 for regular petrol. He said in San Paulo in Brazil E100 is down to an incredibly low US0.48¢/lt.

Mr Katter said the ‘extraordinary’ is the difference between ethanol, now wholesaling in Australia at 70¢/lt - a bowser\'s price of 78¢/ltr, while UL petrol is retailing at $1.40.

“The sell-out by the Nationals and Liberal Parties can only be described as disgusting. The oil companies control what goes through the bowsers. Without mandating we will continue to have the current poisonous mix we call petrol,” Mr Katter said.

He said compounding the problem was Australia’s worsening crisis in its oil reserves.

“Whilst Australia has been ninety percent self sufficient in oil, over the next four years it will fall to less than 50%,” he said.

Mr Katter said the huge difference in price between petrol and ethanol is because petrol excise is 38¢/lt whilst ethanol is 12¢/lt. He said the $700m loss in revenue would be off-set by an $800m revenue gained from company and income tax revenue derived from $2500m generated by the ethanol industry.

“With projected petrol prices remaining at a dollar twenty, even without the tax difference ethanol is now a cheaper fuel,” Mr Katter said.

He said all that the Government’s policies and oil companies\' disinformation on ethanol had achieved is a reduction in ethanol consumption and production.