The Bush administration has extended a controversial incentive that allows US carmakers to produce vehicles that can burn either petrol or alternative fuels.

According to Reuters, the programme has long been popular with car makers because it helps their vehicles meet federal fuel economy standards while the government calls it a good initiative to help reduce dependence on oil imports.

But environmental and consumer groups reportedly claim the incentive programme is flawed and fails to provide even symbolic energy savings.

Reuters said a flexible-fuel or dual-fuel vehicle is capable of operating on petrol, diesel or an alternative like an ethanol-petrol blend and the incentive, active for several years has just been extended for four years.

Carmakers get a fuel economy credit of 1 mpg for producing flex-fuel models and many experts agree that the number of dual-fuel models produced – two million on the road today – has helped carmakers meet the federally mandated fuel economy targets, Reuters said.

Those regulations require passenger cars to average 27.5 mpg while light trucks, which include SUVs, minivans and pickups, must get 20.7 mpg this year.

But Reuters said critics claim the programme is a mirage and contend manufacturers are getting important fuel economy credits for their vehicles without proof that motorists are using alternative fuels.

The report cited David Friedman, research director of the clean-vehicles program at the Union of Concerned Scientists, saying that virtually all dual-fuel vehicles use petrol because there are limited numbers of places around the country where motorists can fill up with ethanol blends or other alternatives.