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Business Reporter
GOVERNMENT has increased the ethanol mandatory blending threshold for unleaded petrol from 5 percent to 10 percent, as the supply of ethanol has stabilised.
Zimbabwe Energy Regulatory Authority chief executive officer Gloria Magombo said that the Ministry of Energy and Power Development had increased the legislative blending threshold, after noting improvement in supply.
She also said this had allowed Zimbabwe, which faces liquidity and foreign currency shortages, headroom to save on the hard currency.
Zimbabwe’s 1,2 million vehicles require about 1,5 billion litres of fuel, both diesel and petrol, to keep the wheels on the tarmacs, but importing the fuel has since the better part of last year been a struggle due to shortage of forex.
Engineer Magombo said the country was currently producing an average of 250 000 litres of anhydrous ethanol per day, mostly for blending with unleaded petrol, which it imports.
“(Threshold) was reduced to 5 percent through a Government gazette, but that has been revised back to 10 percent. The statutory instrument allows the Minister of Energy and Power development to vary the threshold depending on production,” she said.
“The Minister issues Statutory Instruments to say we want this level. When production level increases the minister will issue another SI for (Zimbabwe) to go to 15 percent,” Engineer Magombo said.
“As such, it depends on supply constraints, when it goes back to normal, such as is the case now, we move to the next level.”
Government has had to constantly keep its hands on the pulse regarding ethanol blending thresholds, in line with the prevailing levels of production, which sometimes falls to levels that cause intermittent shortages in the market.
This has often caused analysts to call for liberalisation of ethanol supply to include private players and create healthy competition in a market monopolized by Green Fuel, sole authorized supplier in which Government is joint owner.
Green Fuel’s Chisumbanje Ethanol Project in the eastern highlands is a national project of great strategic importance where ethanol is produced from sugarcane. The plant is seen as one of Africa’s largest ethanol projects.
The project consists of sugarcane plantations in Chisumbanje and Middle Sabi, with the ethanol plant being located in Chisumbanje. It is a consortium of local investors in partnership with Government’s Agriculture and Rural Development Authority.
At its peak, the Chisumbanje ethanol project – and ARDA’s cane growing adjacent farms operated by the private investors trading as Rating and Macdom, has created employment for more than 8000 people, becoming one of the single largest job creation ventures in the country in recent years.
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