Liberalise Ethanol Production — Energy Council
The Zimbabwe Energy Council (Zec) says government must allow other ethanol producers to participate in ethanol blending to allow for increased investor participation in the sector.
Currently, Green Fuel, a joint venture between the government’s Agricultural and Rural Development Authority and businessman Billy Rautenbach’s Macdom and Rating Investments, is the country’s sole licensed producer of ethanol for blending purposes.
However, the company has on many occasions failed to meet demand, which currently stands at over 250 000 litres per day for blending of petrol to E15.
For instance, between December and April, sugarcane harvesting is normally halted to enable plant maintenance, leading to a suspension in the production of ethanol.
Hippo Valley, another major producer of ethanol, is not licenced to supply its product for blending.
The Tongaat Hulett subsidiary exports its ethanol, save for the period it provides cover for the intermittent shortages during harvesting period.
Zec yesterday said it had been approached by a wide-spectrum of its members to lobby for broader participation in fuel blending by other ethanol producers.
“In spite of the government of Zimbabwe indicating that the sector is open to interested investors, the Statutory Instrument 17 of 2013 is very restrictive on who should participate in the sector.
“As the business council in the energy sector, we would like to see the ethanol space being opened up in order to grow the sector. The growth within the sector has stalled. There has been no new investment, neither is there new money coming in the sector in spite of potential. Investors desire to enter the market,” Panganayi Sithole, a director with Zec, said.
Sithole indicated that it was important for government — in line with its five-year economic blue print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation — to liberalise the sector, which has potential to create new jobs.
“In addition, due to the location of Zimbabwe, the sector has potential to become the Southern African Development Community hub for green and sustainable fuel supported by the Protocol on Energy,” he added.
Industry experts argue that the opening of ethanol production to various players would result in competitive fuel prices.
Zimbabwe fuel prices have remained high compared to other countries in the sub-region despite government’s decision to enforce mandatory blending of petroleum products almost four years ago, claiming it would bring down prices and reduce the country’s import bill.
The country’s E15 blend, which should be cheaper than unleaded fuel, is going for between $1,32 and $1,35 per litre at service stations in Zimbabwe, which is far more expensive than several countries in the region using unleaded fuel.
Petrol in Botswana, South Africa, Namibia, Tanzania and Swaziland is comparatively cheaper at $1,06, $1,19, $1,08, $1,29 and $1,14 per litre respectively.
In landlocked Zambia, unleaded fuel is currently selling for $1,10 per litre, while in Tanzania the commodity is selling for $1,05 per litre.
The average pump price for unleaded fuel in South Africa is $1,09 per litre, while in Namibia petrol costs about $1 per litre. – By John Kachembere , Business Editor
