(puts his pseudo-lawyer hat on)
The way I'm reading the article, the rationale is not so much about what the guy put in his car as that the guy used that stuff to impel his car onto tax-bought roadways. The fuel tax is much like a toll without the booth: if he didn't pay but he's still using the roads...
I know, you can argue the loophole of offroading. But, hey, maybe you wouldn't get fined for that. Maybe the government would waive the necessity of a tax in that case. OMG! FLIEGENSCHWEINE!
Seriously, though, the money would come from somewhere - if not this tax, then they'll draw up a new tax to get the eco-fuelers.