BP says that 0.5 percent biofuels target in New Zealand will cause 27-cent-per-gallon fuel price increase

In New Zealand, BP testified that biofuel requirements proposed to take effect July 1st would result in a price increase of 27 cents per gallon or more, for diesel and gasoline.

The oil refiner said that the cost increase, on a target of 0.53 percent biofuels content in 2008, rising to 3.4 percent in 2012, would come as a result of infrastructure requirements to move and store the fuels, primarily the building of storage and blending facilities in multiple terminals. Oil companies face a fine of as much as $20 million for missing their obligations, rising to $30 million by 2012

New Zealand’s Prime Minister Helen Clark has committed the government to use B10 blends or electric power for 80 percent of its fleet by 2015, and the country has a 3.4 percent biofuel mandate target for 2012.

In August, a 10 percent ethanol blend went on sale in New Zealand, prompting strong public support from the Green Party while the Director of New Zealand’s Advanced Energy and Material Systems Lab called biofuels a “waste of time and money”.

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