The two state MPs have written to Prime Minister Malcolm Turnbull in response to a recommendation from the Productivity Commission that the 6 per cent ethanol mandate be axed.

Mrs Hancock and Mr Ward said axing the mandate would lead to a loss of local jobs and called on the federal government to immediately reject the commission’s findings.

“The NSW government has invested significantly into the production and promotion of biofuels to the benefit of our region,” Mrs Hancock said.

“Any attempt by the federal government or the Productivity Commission to wind back our reforms would be devastating for our economy and local jobs.”

Mr Ward said he was very disappointed with the commission’s recommendation.

“It is time for the federal government to declare their hand on biofuels and come out against the commission’s findings and declare their support for one of the South Coast’s major indutries,” he said.

Ethanol is produced at Manildra’s operation in Bomaderry, which employs more than 300 people.

In their letter to the Prime Minister, Mrs Hancock and Mr Ward reaffirmed the NSW government’s biofuels policy and called on the federal government to “strongly reject” the commission’s findings.

Gilmore MP Ann Sudmalis the government was considering its response to the Productivity Commission’s report.

“Biofuels have long been part of Australia’s fuel supply chain. Biofuels continue to play an important role in government considerations of a balanced fuel policy,” she said.

“Policy relating to state ethanol or biofuels targets in NSW and the Biofuels Act are matters for the NSW government.”

NRMA media spokesman Peter Khoury took issue with some of the assumptions in the Productivity Commission report.

“There are a couple of assumptions we would question. One is that as a result of the mandate motorists were denied choice,” he said.

The removal of regular unleaded bowsers from service stations was reversed some years, he said.

Mr Khoury also took issue with the assumption e10 fuel pushed up prices.

He said there was a lot of misinformation about the best fuels to use.

“People are buying premium thinking it will have the best outcome. The reality is it makes little difference in most vehicles.”     

Fuel security was another factor in maintaining a policy that included biofuels, he said.

“We are heavily reliant on fuel imports from some of the most volatile places in the world. That gives us an exposure to volatility in prices,” he said.

Australia has three weeks’ worth of fuel stockpiles at any given time.

“If for whatever reason those tankers stop coming, we have a real national security issue,” he said.