October 20, 2020

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Fuel Blending Is Mandatory- ZERA

By Sharon Chigeza

Parliament- Blending of fuel is mandatory and speaks to the Paris Agreement on reduction of greenhouse gases through elimination of fossil fuels, Zimbabwe Energy Regulatory Authority (ZERA) chief executive officer, Edington Mazambani said.

Mazambani told the parliamentary portfolio committee on energy and power development that it was mandatory for the country to blend its fuel regardless of the outcry on the price of fuel as ethanol costs three times more than imported unleaded petrol.

“There is need to interrogate the prices of ethanol as fuel has become more expensive and has a hold on controlling prices of goods and services, but the price of ethanol is the same since the promulgation of blending of fuel in 2013.

Due to climate change, countries are adapting to new ways of producing energy while some are already manufacturing electric vehicles” he added.

Queries were raised as to why the country was failing to adapt to cheaper means of serving it’s citizenry in such times as the Covid-19 period with most struggling to put food on the table.

Mazambani appeared together with National Oil Company (NOIC) chairman, Daniel Mckenzie Ncube to give oral evidence on the fuel supply and leakages in the country.

Legislators asked both parties to respond to why citizens were made to buy fuel at a high cost when other countries also producing ethanol have cheaper fuel and other African countries passing through Zimbabwe are also selling unleaded fuel cheaper than Zimbabwe.

Ncube told Parliament that the pipeline is currently pumping 6 million litres a day and can be boosted up to pump 10 million litres yet still they are fuel stations which are always dry without the precious commodity.

 

Both NOIC and ZERA admitted to leakages and holding of fuel due to various reasons which include loss in capital expenditure caused by selling of fuel using ZWL currency which is being affected by inflation.

“Every month fuel dealers are complaining of loses as in most cases they buy and sell fuel at a lower price while the exchange rate is changing upwards daily,” Ncube said.

As the US dollar exchange rate was cited as the major driver to the loss and scarcity of the commodity, ZERA CEO, Mazambani told Parliament that fuel price is likely to go up every week after the introduction of the auction system by the Central Bank on Tuesday which saw the rate going up from 1:25 to 1:57.

He further highlighted that the producers of ethanol besides it being expensive, have created employment, and families are surviving in Chiredzi and Triangle regardless of the effects of the product which was said to be detrimental to petrol engine vehicles.
NOIC and ZERA assured parliament that they were going to increase oversight on fuel dealers, monitoring them every week while interrogating the pricing system of ethanol as they both require customer satisfaction and stability in the power and energy industry.

However use of fossil fuels for energy has taken a toll on the environment, from air and water pollution to global warming and countries are being urged to do away with fossil fuels.