HARARE - Zimbabwe's energy sector regulator says it is ready to licence new ethanol producers to avoid dependency on a single supplier, Green Fuel (GF).
Under the country’s mandatory blending policy, only GF is licensed or accredited to trade the commodity for petrol blending purposes.
Gloria Magombo, Zimbabwe Energy Regulatory Authority chief executive, told Business Live that they are “prepared to license other prospective producers provided they meet the conditions”.
“It is always good to have more suppliers in the country to remove dependency on single supply of ethanol. As such the door is open to other investors to do so,” she said.
Zimbabwe requires about 80 million litres of ethanol annually.
Magombo said the current law requires that an ethanol producer for mandatory blending has to be in partnership with the State and “at the moment Green Fuel is the only company in joint venture with government”.
However, the Chisumbanje-based company has allegedly encountered ethanol supply challenges, compelling government to engage Triangle Limited — a subsidiary of South Africa-based Tongaat Hulett — to augment supplies.
Early this year, government had to engage Triangle after GF had failed to meet ethanol demand due to incessant rains.
With an installed capacity of 40 million litres of ethanol annually, Triangle has only been able to do or churn out 24 million litres due to low market demand.
The company’s domestic market is made up of alcohol and beverages manufacturers, and paint producers.
Meanwhile, government is reportedly mulling a number of measures to ban the transportation of fuels by road on the grounds that it was damaging roads and to curb the illegal importation of petroleum products — often brought in as transit consignment, but offloaded in Zimbabwe.
Under this plan, President Robert Mugabe’s government wants fuel importers to use the Zimbabwe-Mozambique pipeline, in order to aid Gershem Pasi’s Zimbabwe Revenue Authority (Zimra) to maximise revenue collection and lessen infrastructure damage.
As such, Energy minister Dzikamai Mavhaire told a local weekly newspaper that he was to engage two other government departments to help with the policy because the Feruka pipeline falls under the purview of Obert Mpofu’s Transport ministry.
“My ministry is discussing with the ministry of Industry and Commerce, and Transport and Infrastructure Development to curb usage of road on fuel transport and confine cartage of fuel from Beira to Harare to the pipeline,” he said.
Zimbabwe owns part of the 400 kilometre-long Feruka pipeline — constructed in the 1960s— while the other is controlled by the Mozambican government.
Approximately six million litres of fuel is pumped daily through the pipeline, which has a maximum capacity of eight million litres per day.
An average 30 percent of Zimbabwe’s fuels is transported by road.