Ethanol blending slashed to 5%

Government has reduced mandatory petrol blending from 15 percent to five percent due to ethanol shortages.

Authorities imposed mandatory blending, which was increased to 15 percent from 10 percent in 2015, in a move targeted at reducing the country's fuel import bill - around $45 million per month.

Energy minister Samuel Undenge said the blending levels will be kept low until the situation improves.

"The blending of ethanol and unleaded petrol at E15 is now unsustainable because there is now an inadequate supply of ethanol, to sustain blending at 15 per centum level," he said in a government gazette published last Friday.

"It is hereby notified that, in terms of Section 4 (1) of the petroleum regulations, 2013, published in Statutory Instrument 17 of 2013, as amended by Statutory Instrument 81 of 2014, the minister approves the current level of mandatory blending to five per centum," Undenge said.

"The consequence of this approval is that all licensee operators shall, from the date of publication of this notice, be mandated to sell unleaded petrol which is blended at five per centum."

Zimbabwe obtains ethanol from the multi-million dollar Chisumbanje plant in the southeast of the country - jointly owned by a State company and private investors - which has capacity to produce 250 000 litres of ethanol a day.

It also gets supplies from Triangle, wholly-owned by South Africa's Tongaat Hullett, which also has a 50,3 percent stake in Hippo Valley and has capacity to produce 3,6 million litres of the fuel per year.

Between December and April, sugar cane harvesting is halted to enable plant maintenance, leading to a moratorium in the production of ethanol.

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 E15 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.