HARARE – Zimbabwe has increased mandatory petrol blending from five percent to 10 percent due to increasing supplies of ethanol.
This comes after government in March reduced to five percent from 15 percent the mandatory amount of local ethanol to be blended with petrol as President Robert Mugabe’s cash-squeezed government sought to reduce its fuel import bill.
Energy minister Samuel Undenge had slashed the blending levels pending improvement of the situation.
Undenge on Friday increased the threshold as national ethanol supplies improve.
“It is hereby notified that, the minister of Energy….in terms of section 4 of the petroleum regulations published in Statutory Instrument 81 of 2014, approved the increase of mandatory blending to 10 per cent,” he said in a Government Gazette published on Friday.
“The consequence of this approval is that all licensed operators shall, from the date of publication, be mandated to sell unleaded petrol blended at E10.”
Zimbabwe obtains ethanol from a $600 million sugar plant in the southeast of the country which is jointly owned by a State company and private investors which has capacity to produce 250 000 litres of ethanol a day; and from Triangle, wholly-owned by South Africa’s Tongaat Hullett, which also has a 50,3 percent stake in Hippo Valley. The Triangle plant has the capacity to produce 3,6 million litres of ethanol, made out of sugarcane by-product.
Between December and April, sugar cane harvesting is halted to enable plant maintenance, leading to a moratorium in the production of ethanol.
The off-crop season is now over, and sugar milling has resumed, resulting in a boost in ethanol supplies.
Official figures show the southern African country spends some $45 million each month to import fuel.
This comes as Zimbabwe’s fuel prices have remained very high compared to other countries in the sub-region despite government’s unilateral decision to enforce mandatory blending of petroleum products almost four years ago, claiming it would bring down prices and reduce the country’s import bill.
The E10 blend, which should be cheaper than unleaded fuel, is going for between $1,35 and $1,39 per litre at service stations in Zimbabwe, which is far more expensive than several countries in the region using unleaded fuel.
The country’s neighbours Botswana, South Africa, Namibia, Tanzania and Swaziland all have cheaper petrol costing $1,06, $1,19, $1,08, $1,29 and $1,14 per litre respectively.
In Zambia, a landlocked country like Zimbabwe, unleaded fuel is currently selling for $1,10 per litre, while in Tanzania the commodity is selling for $1,05 per litre.
The average pump price for unleaded fuel in South Africa is $1,09 per litre while in Namibia petrol costs about $1 per litre.