Australian auto industry website GoAuto has reported that independent Australian petrol retailer United Petroleum has promised to open two E85 pumps in Australia within three months.

The two ethanol-based pumps are expected to be located in South Melbourne and on Sydney's lower north shore, the report said.

GoAuto has also learned of at least seven other E85 outlets located in NSW, but these are not yet licensed to sell to private consumers.

They currently supply a fleet of 180 vehicles that have been converted by Australia's largest bio-fuel producer, the locally-owned and Sydney-based Manildra Group, which will also supply United.

United Petroleum general manager David Szymczak said that the E85 fuel would be blended locally, with the ethanol content made from sugarcane or wheat.

United claims to be Australia's leading independent petrol retailer, with 280 stations nationally, and also sells E10 (10 per cent ethanol) in all states except WA.

The only new cars currently able to run on E85 are the Saab 9-5 BioPower that was released last month and similar versions of the new 9-3 that were formally launched in Melbourne recently.

GoAuto also points out that Saab Australia has put a A$1000 premium on the price of 9-3 BioPower models (starting at A$44,400), whereas the 9-5 model carries a A$1500 premium.

Mr Szymczak said at the Saab launch that United needed to work through some government and EPA compliance issues before opening the E85 pumps, but he does not expect any complications and said they should be operational in two to three months.

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