With the federal government’s ethanol taskforce expected to report to the government at the end of next month, federal trade minister and deputy leader of the National Party, Mark Vaile said that ethanol blends should be offered at all service stations.

Vaile told the Ten Network he was “more confident than ever” the federal government would go ahead with ethanol.

"We've maintained since prior to 2001 the position that we want to see the use of 350 million litres of biofuels across the fuel mix across Australia by 2010," he said.

"There are studies that indicate that ethanol [has] got environmental advantages, it's got economic advantages in terms of industry development in regional Australia and of course it's got the opportunity to replace imports...

"[But] we've got to continue to work on the oil companies to ensure that consumers get choice at the bowser - consumers that want to be environmentally responsible as far as removing extra greenhouse gases from the environment and consumers that want to see new rural industries start up."

The taskforce is deciding on ethanol’s impact on health, the environment and car engine wear.

Vaile argued ethanol would be good for the environment, the bush and the trade deficit.

Australia’s oil imports have ballooned in the past five years – up to A$5 billion worth this year compared to A$400 million in 2000/1.

Vaile has previously taken swipes at oil companies, accusing them of blocking access to ethanol when it was used in the United States, Japan, Brazil and Europe.

At the the National’s conference last week, the Government's idea was backed to mix biofuels made from grains and sugar cane into the Australia’s fuel.

Currently, about 90% of the of the ethanol produced in Australia each year is used as an additive for petrol.

But opinion about the ethanol industry’s viability is divided within the Liberal-National coalition.

The industry has already received about A$100 million in tax breaks, and industry minister Ian McFarlane has asked whether the group was “squandering” taxpayer dollars.

Prime Minister John Howard is also a friend of Dick Honan who operates Australia’s largest ethanol producer Minildra - a 90 million litre a year

factory near Nowra in New South Wales.

Ethanol producers plan to produce 350 million litres in Australia by 2010.