Motorist Ashleigh Snowden said she had a second family car which could not use E10. "The ban would make our older car too expensive to run," she said.

Service manager Anthony Belcastro, also Riverstone Chamber of Commerce and Industry president, said it was the best decision for him and his customers.

He said both fuels should be sold until the question of supply was settled.

"It will drive up petrol prices if the ban is imposed on July 1 before the question of ample supply of both fuels is settled," he said. "It will render useless some 750,000 older cars which cannot use E10.

Mr O'Farrell announced last week that the cabinet would dump the ban, under which regular unleaded was to be replaced by the 10 per cent ethanol blend, E10.

But he insisted the state's 6 per cent ethanol mandate — which the ban was designed to enforce — would stay, causing BP Australia to warn that little was likely to change for motorists.

BP's director of government affairs, Richard Wise, said enforcing the mandate under which petrol companies must ensure 6 per cent of all fuel sold is ethanol meant virtually all unleaded petrol in NSW would have to be sold as E10.

He said it still ignored the fundamentals of ethanol supply and demand in NSW.

But the general manager of the Australasian Convenience and Petroleum Marketers Association, Nic Moulis, said that his association looked forward to seeing the legislation and then working with the government to get the policy right.