A NSW government program mandating the use of E10 ethanol-blended petrol is under fire.

The state’s ethanol mandate says ethanol should be 6 per cent of all petrol sold; a move designed to significantly increase E10 consumption.

To reach the 6 per cent ethanol mandate, 60 per cent of all petrol sales need to be E10.

But the scheme has seen E10's share of all petrol sold in NSW fall from 24.5 per cent in 2016 to 23.9 per cent this year.

The figures come just months after the Productivity Commission called for the scheme to be axed because it increases petrol prices and reduces competition.

Retailers says businesses that now have to sell E10 have had to increase the price of petrol to recoup the cost of equipment upgrades.

Fairfax Media reports have previously revealed that ethanol producer Manildra held up to 20 meetings with NSW ministers and donated more than $160,000 to the Coalition before the introduction of new laws.

Manildra - Australia's largest ethanol producer - has reportedly donated over $4 million to the Liberals, Nationals and Labor since 1998.

Australasian Convenience and Petroleum Marketers Association chief Mark McKenzie says the mandatory E10 laws are “a bad joke”.

“These laws are increasing fuel costs for NSW motorists and increasing the costs for NSW small businesses, yet total usage of E10 has continued to fall,” he told the Sydney Morning Herald.

NSW Greens member Jeremy Buckingham said motorists “are being forced to pay for a product they don't want simply to satisfy a major donor to the Liberal, National and Labor Parties”.