Articles by Nigel Wilson

Dick Honan, the man who sparked the political debate that led to oil companies being forced to offer motorists ethanol/petrol blends, has won again.BP announced yesterday it had contracted with Mr Honan's Manildra Group for the supply of 40 million litres of ethanol during the next year, with the possibility of extending the agreement for a further two years.Manildra Group is Australia's biggest producer of ethanol, which is a by-product of its wheat-based industrial starch business, based at Bomaderry in southeastern NSW.For years Mr Honan conducted an acrimonious debate with the major oil companies, accusing them of refusing to supply him with wholesale supplies of petrol so that he could distribute a 20 per cent ethanol petrol blend.The use of ethanol reduces the petroleum industry's share of the fuel market.In 2003, it was revealed that Mr Honan had met secretly with Prime Minister John Howard in August 2002 before the Government introduced a scheme under which ethanol would not attract excise until 2011, thus destroying an ethanol import market.That policy was designed to force oil companies to supply ethanol blends, so that the Government's uncosted 2002 federal election promise to develop biofuels industry of 350 million litres a year by 2010, originally seen as a boost to the struggling sugar industry, which could be achieved.While the federal Government has encouraged oil companies to blend ethanol with petrol, up to a maximum of 10 per cent, the NSW Government has mandated a 2 per cent ethanol level across the product range from October 1.Oil company representatives said yesterday this was not achievable across the whole of the retail business, as many petrol distributors and wholesalers would not be ready in time.Effectively, the switch to E10 blends will see the gradual wind-back of the existing 91-octane unleaded petrol, with the ethanol blends having octane ratings of about 94 , making them compatible with new, fuel-efficient car engines.BP said yesterday that, as a result of its deal with Manildra, it would offer new BP Unleaded 91 to NSW motorists at a 3c a litre discount through its Biorewards program.Currently, BP's 88 sites across Queensland, NSW and the ACT are being supplied with the new fuel. By the end of the year all 50 BP branded service stations in NSW will be selling the new product in place of regular unleaded petrol.BP Australia president Gerry Hueston said the company's actions demonstrated its commitment to create a sustainable future for biofuels in Australia.Both Shell and Caltex said yesterday that BP was well behind in supplying ethanol-petrol blends across Australia. 

Fuel prices appear set to increase by the end of the month after the International Energy Agency warned that many refineries around the world seem unable to process sufficient quantities of crude oil.The Paris-based organisation, which acts as an energy adviser to 26 developed countries, made the comment after crude oil prices reached a 10-month high in New York on fears that refinery breakdowns would slow US petrol production.According to a survey published in the US, refinery output was just over 90 per cent last month, compared with more than 93 per cent at the same time last year.In Singapore yesterday crude oil for August delivery was at $US71.31 a barrel, down US10c on the New York close on Tuesday.The August contract had risen US32c, or 0.5 per cent, to $US71.41 a barrel during Tuesday, reaching its highest close since August 25.On the London market, which accounts for more than 80 per cent of the world's traded oil, a barrel of Brent crude was down US5c to $US72.88 a barrel.Both markets have been affected by the US Independence Day holiday, which delayed the scheduled release of data on US fuel inventories by one day.Demand for petrol in the US, the world's biggest oil user, usually peaks between June and August as summer holiday travel puts more cars on the road.Oil reached its record of $US78.40 on July 14 last year when increased demand coincided with the release of forecasts indicating an above-average US hurricane season.But prices declined 26 per cent in 11 weeks as holiday driving demand eased and the hurricane season passed without any major damage to oil and gas production assets.In its latest report the Australian Institute of Petroleum said that unleaded petrol prices across the country were trending down at 121.7c a litre.They have fallen 3c per a litre in the past month but are still ahead of the 118.5c a litre they've averaged during the past 12 months.The consumer watchdog, the ACCC, has been instructed by the federal Government to investigate why retail petrol prices have not moved in line with movements in the Singapore benchmark price for motor gasoline.The ACCC investigation will report by mid-October.