John Mangudya, The Reserve Bank of Zimbabwe governor on Thursday told Parliament that blending of ethanol with fuel saves the economy millions of dollars.
The governor appeared before the Joel Gabbuza-led Parliamentary Portfolio Committee on Energy, beside Energy minister Joram Gumbo, to address on the fuel position in the country after MPs had asked if Zimbabwe had enough ethanol to supplement fuel imports.
The government increased mandatory blending ratio of unleaded petrol from 15% ethanol to 20% last year, following a notable increase in the quantity of ethanol supplied by GreenFuel.
Our fuel consumption patterns have been such that if we were to consume 50 million litres of fuel, we would mix it with ethanol and, therefore, make savings of about $10 million because we have 20% ethanol going into fuel
Energy ministry secretary Gloria Magombo, who also appeared before the committee, was asked to explain if ethanol production will in any way alleviate fuel shortages in the country.
Magombo said, while ethanol gave substitution for the amount of petrol consumed in the country, there was, however, a shortage of sugarcane during this season which also affected fuel supplies.
We have import substitution for petrol when we blend it with ethanol, but during this time of the season, we are constrained in terms of supplies of ethanol which gives us substitution of the amount of petrol consumed because sugar plantations from December to May experience very low production.
However, to provide for constant supplies, we are building additional storage tanks for supplies of sufficient ethanol so that we continue blending. We also have a flat blending rate where the government buys extra stock of ethanol, and once we have improved the production it will assist us to ensure energy security in the country.
MPs from the Energy representatives, however, felt that the ministry was helping GreenFuel more, on ethanol production, than other sugar producers like Tongaat Hulett.
Ethanol from Chisumbanje is very expensive. Why is it that it is the only supplier supported when there are other players that have a better capacity to produce ethanol?” demanded Dangamvura Chikanga MP Prosper Mutseyami.
Magombo said Zimbabwe got its ethanol through Chisumbanje (GreenFuel) and other sugar producers like Triangle through Fuel Ethanol Company of Zimbabwe.
Chipinge South MP, Enock Porusingazi also blasted the administration for starting jatropha projects and later deserting them, to assist in fuel production.
He said the initiatives were a misuse of money and were now white elephants.