Unlocking Savings at the Pump: How Ethanol Could Lead to Cheaper Fuel Prices

Amidst the escalating petrol prices crippling Australian drivers, the government is urging a shift towards ethanol-blended fuels as a potential relief measure. This move comes as officials deliberate over enhancing ethanol production to alleviate financial pressure on consumers.

Recent data from the fuel monitoring platform, Motormouth, revealed a concerning trend on Wednesday, with diesel prices exceeding $3 per liter across all major cities, Darwin being the only exception. This sharp increase has ignited widespread concern among motorists nationwide.

Fuel shortages further compound the issue, as more than 500 petrol stations grapple with stockouts of at least one fuel type. In response, the national cabinet is scheduled to reconvene next week to chart a course of action aimed at stabilizing the situation.

In a bid to address these challenges, the government has implemented several alterations to fuel standards, including adjustments to diesel specifications and a temporary hike in sulphur content. Additionally, emergency fuel reserves have been released to the market. Despite these efforts, there remains mounting pressure for more comprehensive solutions to bolster supply.

Energy Minister Chris Bowen has acknowledged that one of the strategies under consideration involves increasing the ethanol content in fuel supplies. This proposal is seen as a viable step towards not only easing consumer costs but also enhancing fuel availability across the nation.

“There’s suggestions around ethanol, which we’re looking at, but I’m not in a position to announce them, or indeed say that they might happen, because you’ve got to work these things through carefully,” he told reporters in Canberra on Wednesday.

“Could it play some potential role? Many things could.”

Australia currently offers E10 fuels, but could look at E15 or E20, levels on offer in countries like the United States.

What is ethanol inside E10 fuel?

Ethanol is a grain alcohol that can be used as a petroleum replacement.

It’s made from the byproduct of the production of sugar cane, wheat or sorghum feedstock grain.

E10 is a biofuel that contains a 10 per cent mixture of ethanol and is generally cheaper to produce. This is reflected in its price at the bowser.

The latest NRMA fuel price report revealed average E10 at 227.6 cents per litre, Premium 95 at 245.5 and Premium 98 at 254.3 cents per litre.

How can it affect your car?

Ethanol has a high octane rating, giving it the ability to resist engine knock and allowing it to burn better than gasoline.

Bioenergy Australia CEO Shahana McKenzie told SBS News the high-octane burning is why it’s used for a lot of supercar racing.

The highest of these is E85 — a specialty biofuel offered in a limited number of stations for compatible cars — which McKenzie says allows you to “accelerate very quickly”.

Ethanol is considered hygroscopic, meaning it absorbs water and causes corrosion, often leading to damage in older engines or cars.

It also runs through the fuel tank and can loosen any scale or buildup that is already in there.

NRMA spokesperson Peter Khoury busted assertions that it would drastically reduce your mileage, referring to tests on three vehicles a few years ago.

“We found one was pretty much the same, there was a slight decrease compared to the petrol in another and a slight increase in one,” he told SBS News.

“It was all very much within the margin of error, it’s not like people were losing hundreds of kilometres on a tank.”

He said motorists should check their fuel caps but concludes “most cars in Australia can use E10, and if they can, we would encourage people to use it.”

Could we boost production?

McKenzie said Australia’s two ethanol refineries are not operating at their capacity, allowing the industry to support scaling up.

She estimates that if the government were to mandate more ethanol to enter the market, close to half a billion litres of additional annual capacity could be added to the Australian market.

While ethanol is highly flammable, the concentration levels in our fuels are lower than in other countries.

Both McKenzie and Khory point overseas to Brazil and the United States, where E15 or E20 is more readily available.

“You can’t get fuel in America without ethanol blended in it, and in a number of states, and the number of states is growing, you can’t get ethanol in it with less than 15 per cent,” Khoury said.

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