SERVICE stations will be offered a $20,000 carrot to introduce ethanol-laced fuel to their customers - a key part of a $1.6 billion bid to ease petrol pain. In a major announcement today, the government said up to $10,000 will be provided to service stations after the conversion is complete, and another $10,000 after ethanol blend fuel sales targets are reached. "The additional grant on reaching a sales target will provide a clear incentive for retailers to discount the price of E10 fuel," Prime Minister John Howard said. "Recipients of grants from the ethanol distribution program will be expected to sell ethanol blends at a discount and to display the price of ethanol blends alongside price information for other petroleum products." However, Mr Howard ruled out making ethanol a mandated part of the Australian petrol. "This government believes in consumer choice we are not persuaded to mandate the use of ethanol," he said. The ethanol plan will operate alongside other incentives to get motorists using LPG. Mr Howard said from today the government would contribute $1,000 towards the purchase cost of new factory-fitted LPG powered vehicles. The government will also provide a $2,000 grant to the cost of converting cars to LPG for private use. Mr Howard said LPG would, on the fuel bill for a six cylinder vehicle travelling 15,000 kilometres a year, save around $27 a week or $1,400 a year in fuel costs. ``The estimated cost of the LPG incentives I am announcing today is $677.1 million over the eight year life of the program," he said. "Taking into account revenue forgone, the total cost is more than $1.3 billion over eight years." Mr Howard also announced the government will spend an additional $123.5 million to extend and expand its renewable remote power generation program. Another $76.4 million will be spent to expand Geoscience Australia's current seismic acquisition program. This will focus on new frontier offshore areas to be chosen in consultation with industry. Almost $59 million will be spent identifying potential on-shore energy sources such as petroleum and geothermal energy. Industry Minister Ian Macfarlane has been asked to put up a proposal to cabinet to fund a program to make Australia a leader in gas-to-liquids and coal-to-liquids research. Mr Howard said Australia had benefited from high demand for energy sources. But he said Australians felt the pain of high petrol prices every time they filled up their cars at the bowser. "This is a difficult time for Australians faced with high petrol prices," he said. "And it is only appropriate that the benefits which accrue to Australia from our substantial resource base flow beyond a narrow part of our society."