The federal Government has so far refused to cap ethanol levels because it says evidence on whether the additive damages engines is inconclusive.
Instead it has urged states to force petrol stations to display information about ethanol levels in their fuel, so motorists can make their own choices.
Some cynics believe the federal Government motives have more to do with the Liberal Party's close links with ethanol industry heavyweights.
In other transport fuel news, the Diesel Fuel Rebate Scheme and the Diesel and Alternative Fuels Grants Scheme will be replaced by a single Energy Grant Scheme from July 1 if legislation introduced by Treasurer Peter Costello passes through federal parliament.
