Golden Sibanda Senior Business Reporter —
GOVERNMENT has set aside sufficient reserves of ethanol for blending to cater for unforeseen glitches in production during the rainy season, the Zimbabwe Energy Regulatory Authority has said.
ZERA chief executive Engineer Gloria Magombo said the Ministry of Energy and Power Development has stocked up a certain amount of ethanol for release into the market if there are shortages. This is part of proactive measures to avoid confusion of the past when dealers were left in a quandary over blending ethanol after sole licensed supplier, Green Fuel, could not meet demand.
Green Fuel, which operates the Chisumbanje Ethanol Plant, could not produce enough ethanol to meet the dealers’ requirements for compliance with the 15 percent mandatory blending.
Eng Magombo said measures have been put in place to avoid shortages of ethanol in the market, especially ahead of the rainy season where the supplier usually encounters challenges in harvesting its sugar cane.
“We have adequate (stocks) to meet demand. Current ethanol blending levels are E15 and the average production rate over the last three months is 6 million litres/month,” Eng Magombo said.
Government had to relax its E15 mandatory blending threshold last year, as incessant rains made it difficult for Green Fuel to harvest its cane fields in Chisumbanje to provide feedstock for ethanol. Government has been criticised in the past over its decision to create monopoly, Green Fuel, a partnership between Macdom, Rating and State owned Agricultural and Rural Development Authority.
It was felt that the monopoly killed competition in the market leaving consumers, supposed ultimate beneficiaries from blending of petrol with ethanol, at the mercy of the ethanol monopoly. Further, critics have pointed out that benefits of lower fuel price have not been realised as envisaged earlier despite the local blending, a phenomenon also common when global fuel prices drop.