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Zimbabwe hopes for savings as it unveils ethanol-blending rules

1st March 2013

By: Barnabas Thondhlana

Creamer Media Correspondent

  

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Zimbabwe stands to save about $2-million a month following government’s deci-sion to pass new regulations making it mandatory for oil companies to sell blended fuel.

According to Statutory Instrument 17 of 2013, published last week, fuel dealers are compelled to blend petrol with 5% of locally produced ethanol.

Zimbabwe spends $45-million a month on importing 30-million to 40-million litres of petrol.

The Zimbabwe Energy Council (ZEC) says the decision will save the country between 1.5- million and 2.5-million litres in fuel imports – equivalent to $2-million every month.

“While ZEC would have been comfortable with a 10% mandatory blending, we believe that this is a strong starting point and we will fully support government in this regard,” says ZEC executive director Panganayi Sithole.

Business mogul Billy Rautenbach’s multimillion-dollar Chisumbanje ethanol project ceased operations last year owing to policy fights in government, and Sithole says: “Hopefully, the over 2 000 employees that were laid off will be recalled as a matter of urgency. We believe that the benefits of this decision will trickle down to motorists, who will enjoy significant savings.”

Witness Chinyama, an economist, says the new regulations will free funds for other projects of national importance.

“Mandatory blending will have a positive effect in that it will reduce the price of fuel and Zimbabweans will benefit in the long term,” he says.

The country has been battling an acute liquidity crisis since the introduction of a multicurrency system — dominated by the US dollar — early 2009.

Energy and Power Development Minister Elton Mangoma says the new regulations will assist in saving “the country and the planet, while, at the same time, we are creating our own industry”.

“We are going towards a green economy and we are talking of biofuel,” he says.

In terms of the new regulations, producers will be required to make submissions to the Zimbabwe Energy Regulatory Authority (Zera) specifying that the ethanol used is compliant with set standards.

They will also provide monthly returns on the volume of ethanol produced and to whom it was sold and the quantity sold to each buyer.

The blenders are also expected to provide Zera with weekly returns on the volumes and names of the source of the ethanol used.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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