Will Zim’s 6 million Litre Ethanol Storage Tanks Address Fuel Challenges?

Harare – In the wake of persistent energy challenges in the country, the Zimbabwe Government is constructing two ethanol storage tanks with a storage capacity of 6 million litres in Mabvuku ENN reports. Zimbabwe mandatorily blends its petrol with 20% ethanol as a way of increasing the volume of fuel supply to the nation. With the construction of these ethanol storage tanks by the National Oil Infrastructure Company of Zimbabwe (NOIC), Zimbabwe will create an ethanol storage capacity of 6 million litres, sufficient to cater for its blending needs during low ethanol production seasons. Will the ethanol storage tanks address the country’s fuel challenges?

Addressing delegates at a Sugar and Ethanol Investment conference in Harare recently, Morgan Mudzinganyama, a director in the Zimbabwe Ministry of Energy and Power Development said that the ethanol storage tanks will support government’s efforts in addressing the prevailing fuel challenges. “We hope to conclude the construction of ethanol storage tanks by December 2019”, said Mudzinganyama. This US$6 million ethanol storage tanks project, which is being funded fully by NOIC was initially set for completion in December 2018, but has been delayed by a year to December 2019 due to financial constraints. Since October 2018, Zimbabwean businesses have endured a very difficult economic environment.

Ethanol is used as a fuel and gasoline additive. It is also extensively used as a solvent in the manufacture of varnishes and perfumes; as a preservative for biological specimens; in the preparation of essences and flavourings; in many medicines and drugs; as a disinfectant and in tinctures (e.g., tincture of iodine).

In the wake of climate change which is threatening the world, Zimbabwe needs to attract further investments in the ethanol value chain to maximise returns and diversify revenue streams. The construction of ethanol storage tanks will only work if there is sustained production of sugarcane in the country, which is not guaranteed considering the current scourge of climate change on our agricultural sector. It is the way that the world is generating and consuming energy that is causing climate change.

Currently, Green Fuel is the sole licensed ethanol producer in Zimbabwe.  As Zimbabwe moves to increase ethanol storage capacity, it is also an opportunity for the Zimbabwe Government to break this monopoly and increase transparency by opening up the market to more players.   The Parliamentary Committee on Mines and Energy met to receive oral evidence from the Ministry of Energy and Power Development, the Ministry of Finance and Economic Development, the Zimbabwe Energy Regulatory Authority (ZERA) and related players on the petroleum sector on 28 May 2018. It was later reported that the ZERA Chief Executive Officer testified that Green Fuel sells ethanol at $1.10 per litre while Triangle Limited sells it at $0.88 per litre.

It is from this perspective of vagueness and monopoly that ENN does not envisage an improvement in fuel supplies and pricing in Zimbabwe after the completion of these ethanol storage tanks without implementing key government reforms on transparency, accountability and fair competition in Zimbabwe’s fuel sector. 

LEAVE A REPLY

Please enter your comment!
Please enter your name here