Sunday, December 01, 2013

(NEWZIMBABWE) Ethanol blending to save Zimbabwe $4m/month
24/10/2013 00:00:00
by Business Day

ZIMBABWE is hoping to save as much as $4m each month after instituting mandatory blending of petrol with 10% ethanol, which is set to start on Thursday.

The country’s energy sector watchdog, the Zimbabwe Energy Regulatory Authority (Zera), said all petrol imported into the country now had to be blended with ethanol before distribution.

The move to force petroleum dealers to sell only blended petrol is also expected to benefit the state-run petroleum company, the National Oil Infrastructure Company (NOIC), which will be in charge of all the blending, sources in the Zimbabwean petroleum industry said on Wednesday.

Zimbabwe imports all of its fuel mostly through Mozambique, Botswana and South Africa, with petrol retailing at about $1.49 a litre while diesel costs about $1.33 a litre.

It was not immediately clear whether individual companies would still be allowed to import petrol and how their stock would be blended.

Zera CEO Gloria Magombo this week said the mandatory blending volume had been increased to 10% ethanol, from 5% before.
This is expected to marginally bring down the price of petrol in Zimbabwe, sources said.

Zera said petroleum distributors in the country had up to 10 days to clear their stock of unleaded petrol to pave the way for petrol blended with 10% ethanol.

Economists said the mandatory blending would allow Zimbabwe to capitalise on opportunities presented with growing sugar cane, an industry in which South African agro-processor Tongaat Hulett is a major player.

"The government will benefit more because all blending will be done through a state-owned company," said economist Johannes Kwangwari. "But there are also opportunities for increased sugar-cane production capacity as ethanol is a by-product."

Zera said the mandatory blending would save see Zimbabwe "about $4m every month in (fuel) imports".

"Ethanol blending contributes towards energy security of the country, reduces the fuel import bill, creates employment and has the potential for power generation," it said.

The government has gazetted amendments to the country’s energy regulations to enforce the mandatory blending.

Ethanol uptake in Zimbabwe, according to Zera, more than doubled to 2.2-million litres in September from July’s consumption spurred by the introduction of mandatory blending.

Ethanol is produced at the $600m Chisumbanje plant in Manicaland province.

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