MUTARE – Mandatory fuel blending has failed to ease the high fuel import bill as ethanol is only managing to save the country an average of $2,4 million per month of the targeted $12 million, Business Times can reveal.
The Zimbabwe Energy Regulatory Authority (ZERA), revealed that an annual average of $28 million in fuel import savings has been realised over the past few years.
However, ethanol producing company, Green Fuel had indicated that it had capacity to save $12 million per month in fuel substitutes, which translates to $144 million per annum as of 2017.
Government introduced fuel blending in 2008 following the controversial licensing of Green Fuel’s Chisumbanje Ethanol Plant, which resumed operations in 2013.
The measure was meant to avert fuel shortages and curb the high import bill that has gobbled close to $10 billion over the past decade.
However, statistics from ZERA indicate that fuel blending import savings have been minimal.
“The saving is at $2,4 million litres per month assuming that there is consistent blending at 20 percent (E20). The annual savings are at about $28 million,” ZERA acting chief executive officer Edington Mazambani said via electronic mail.
Most interestingly petrol imports increased to 467,391,414 litres in 2017 from 413,328,777 litres in 2016 while ethanol production increased to 78,2 million litres from 38,6 million litres during the same period under review.
However, Mazambani said ethanol production for this year dropped as compared to last year.
“The cumulative figure for January to September 2018 is 49,6 million litres as compared to 53,01 million litres produced in 2017,” he said adding that the blending ratio has further dropped to E10.
This is in direct contrast to Green Fuel’s ambitious investment blueprint under its final phase (2017 and 2020).
Under this phase, the investment blueprint had projected production of 450 million litres of ethanol per annum but has only produced a cumulative 352,1 million litres since 2013 to date.
The targeted production would have ensured a blending threshold of E20 and voluntary E85 uptake, thereby ensuring ethanol exports within the region.
This was projected to save the country of $12 million in fuel imports per month and generating up to $25 million per month in ethanol exports, according to Green Fuel.
However, company official Nicole Rautenbach insisted that the company was operating well and supplying sufficient ethanol.
“There isn’t low production. Government has been receiving ethanol for the whole year, it just depends on the blending ratio. But I thinks it’s best if you send question in writing so that I give you accurate details,” said Rautenbach.
Rautenbach had not responded via e-mail at the time of going to print.
However, at a time government is supposed to look to the ethanol producer to ease the high fuel import bill and shortages, it had to scrounge for scarce foreign currency to import more fuel.
Zimbabwe spends between $20 million per week and $80 million per month on Green Fuel in a joint venture between private companies Macdom and Ratings Investment owned by business tycoon Billy Rautenbach and State-entity Agricultural and Rural Development Authority (ARDA).