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Business Reporter
PRESIDENT Mugabe’s announcement that measures are being taken to ensure that the blending of petrol with ethanol is increased to the E20 mandatory blending levels early next year has been hailed as a positive development that will see the full implementation of the Chisumbanje ethanol project.
The President made the announcement during the official opening of the First Session of the Eighth Parliament of Zimbabwe on Tuesday.
Fuel blending company Green Fuel (Pvt) Ltd has been lobbying Government to consider introducing at least 20 percent mandatory ethanol-petrol blending to maximise national benefits from the US$600 million investment at Chisumbanje and in the process guarantee viability of ethanol.
Analyst Mr Witness Chinyama said the President was spot on saying that such a move will ensure fuel self-sufficiency and, more importantly, the project will trigger incremental job creation, thereby guaranteeing decent livelihoods for local communities and other citizens.
Mr Chinyama said the introduction of E5 mandatory blending would guarantee ethanol producers especially the recently licensed Green Fuel a ready market and this is likely to trigger more demand for sugar cane to meet the country’s ethanol requirements.
“Ethanol producers will have a guaranteed market and therefore sugar cane farmers would have to raise their production to meet the ethanol producers’ demand. Once this happens, then prices can be stable or even go down which should eventually trickle down to the fuel consumer as well,” he said.
Mr Chinyama added that mandatory blending of E20 was a good sanctions-busting measure.
“The mandatory blending of fuel has implications on foreign currency as it will reduce the country’s import bill which will free other resources. This development is expected to lower fuel costs, which is a major cost inflation driver,” he said.
He also said that the reduction of the import bill will be good for the balance of payments support whereby the money will be used to serve other developmental purposes. A farmer from Chisumbanje, Mr Robert Chirimambowa, said that as farmers they were excited about the President’s declaration on E20.
“This project has begun to transform our lives as farmers. We thank our Vice President Joice Mujuru because she carried our thirst for development to the highest office in the land.
“We have so many business projects to undertake but they all hinge on the viability of our locally produced ethanol,” he said.
The move taken by Government to implement mandatory blending will re-ignite investor confidence and in anticipation of the 20 percent mandatory blending ratio to facilitate the expansion of the ethanol project.
Online Reporter