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Senior Business Reporter—
THE Zimbabwe Energy Regulatory Authority (Zera) has been challenged to address the information gap in the public domain on the mandatory fuel blending of petrol with ethanol by importers and distributors. Last year, the government adopted a mandatory fuel blending initiative starting with five percent ethanol (E5) before Zera raised the blending threshold to 10 and 15 percent as part of efforts to reduce the cost of fuel in the country.
Zimbabwe’s fuel import bill averages around $120 million per month and so far through the fuel blending the bill has been cut by $20 million a month.
Zera has announced that it will soon scale up monitoring and surveillance of all licensees in the petroleum sector to ensure compliance with the regulations and fuel quality standards.
It is envisaged that the blending threshold would be gradually increased to reach 20 percent before the end of the year.
In a statement, the Employers’ Confederation of Zimbabwe (EMCOZ) executive director John Mufukare said controversy surrounding the pros and cons of mandatory fuel blending has spilled into litigation and was generally raging in the public domain and the business community.
“The controversy arises from the inherent information gap resulting from the lack of formative research to justify the initiative. This was exacerbated by a lack of discourse on policy guidelines to increase the uptake of the bio-fuel as well as matching the level with vehicle import type for compatibility.
“Zera as a technical body has to address the information gap in the public domain on the initiative through appropriate research,” he said.
It said there was need for the regulatory authority to disseminate researched information for public awareness and appreciation of the mandatory blending.
Mufukare said at their recent workshop on mandatory fuel blending Zera chief executive officer Engineer Gloria Magombo on behalf of government reiterated the need for mandatory blending as an effort to reduce dependence on fuel import, enhance fuel supply security, and promote more environmentally friendly fuel.
The employers’ representative body, Mufukare said, however argues that the price at which the product was being sold is higher in comparison to the international price and the calorific value of ethanol compared to petrol.
“Ten litres of ethanol are equivalent to 7,2 litres of petrol, and the procurement price of petrol is between $0,90 and $0,95 per litre.
“The pump price includes taxes and duties which are not levied on ethanol hence there is no justification for charging a premium for blended fuel,” he said.
The government has announced that going forward the price of blended fuel in the country would go down.
Concern has also been raised over the compatibility issues.
“Given the prevalence of old vehicle models in Zimbabwe, E5 grade fuel is preferred compared to E10 for promoting bio fuels at a mandatory level, while resolving compatibility issues.
“There are vehicles that are affected by a blend of 10 percent and more, and will require catalytic convertors.
“Mandatory blending will force the consumer to incur extra costs either for buying the catalytic converters or extra repair costs given the corrosive nature of ethanol,” said Mufukare.
Online Reporter