Petrol mixture fails to attract U.S. motorists

Press, 22 October 1981, Page 9

Petrol mixture fails to attract U.S. motorists

NZPA staff correspondent Washington

Gasohol, a combination of lead-free petrol and ethanol which was once hailed as a partial solution to the energy crisis, is a fizzer in the United States.

The Texaco oil company, which pioneered the sale of gasohol at service stations in America, has announced that it will stop selling it at most places because of falling sales.

The company blamed the high cost of transporting the ethanol — which is made mostly from corn — from the grain-producing areas of the Midwest to the more populated north-eastern region of the United States. Texaco’s vice-president (Mr James Dunlap) also blamed the reluctance of states to give gasohol significant tax incentives.

Although the Federal Government exempted gasohol from a 4c a gallon excise tax, it still cost motorists 4c to 6c a gallon more than regular lead-free petrol in most states. Mr Dunlap said.

Texaco has been selling gasohol at 1600 petrol stations in 19 states. In the wake of a major drive by the Carter Administration, which at one time provided SUSI4SO million in financial aid for. making gasohol

plants, sales rose to 1.5 per cent of the company’s total fuel sales.

This had dropped to less than 1 per cent, Texaco said, as conventional gasoline became plentiful after the 1979 shortages and gasohol remained at a premium price.

President Carter was a strong advocate of gasohol. In January 1980. he announced the diversion of some grain bound for the Soviet Union into a "massive increase" in gasohol production.

The Reagan Administration. aided by what is nowregarded as an oil glut in the United States, has been much less interested in extending gasohol production and sales. An important factor, in the light of President Reagan's Budget-cutting policies, has been the enormous cost of developing the alternative fuel. The Administration is nowsaid to be considering asking Congress to drop the excise tax exemption on gasohol, w-hich is due to last until 1992.

Texaco will stop selling gasohol completely in 15 states in the north-east. It will continue to sell it in four states in the Midwest near a new ethanol plant. Company officials noted that this would reduce transport costs.