The Assistant Treasurer Senator Rod Kemp today announced that the Federal Government had acted to remove the excise incentive to blend methanol with petrol by ensuring that excise is payable on the full volume of the blended product.
The current legislation, which allows blending of methanol without payment of excise duty, will be revoked with effect from midnight tonight (28 July, 2000).
The previous Government in 1994 exempted methanol blended with petrol from excise requirements as part of its alternative fuels strategy.
The Government was concerned at reports that the excise-free status of blended methanol was providing an incentive for practices which may have a detrimental impact on fuel quality. Current evidence suggests that methanol blends are not appropriate as they may have detrimental effects on both engines and air quality.
The Australian Taxation Office has consulted with both industry and relevant government agencies in developing its recommendations regarding the use of blended methanol.
MELBOURNE
28 July, 2000
Media contact: Richard Allsop (03) 9650 7274