Mugabe gives in on ethanol blending

SUSTAINED political pressure and the pledge by ethanol fuel company Green Fuel to fund the 2013/2014 agricultural season have forced President Robert Mugabe to climb down from his resolute opposition to mandatory ethanol blending which has been shrouded in controversy.

Faith Zaba

Government forced through the legislation introducing 5% mandatory blending despite public concerns that the new fuel blend might harm vehicles.

The then coalition government partners, the MDC and MDC-T, resisted demanding an investigation into the deal and compatibility of common cars in Zimbabwe with the fuel.

Senior government officials told the Zimbabwe Independent this week Mugabe had vehemently opposed the proposal for years, insisting that government could not enact a law that benefits one person, referring to controversial businessman Billy Rautenbach, who is a major shareholder in Green Fuel.

The company is a joint venture between state-controlled Agricultural Rural Development Authority (Arda) and companies linked to Rautenbach, Macdom Investments and Rating Investments.

Green fuel is the only company producing anhydrous ethanol that is blended with unleaded petrol. It has been lobbying for ethanol blending since 2009.

Cornered, Mugabe not only capitulated to the push for 5% mandatory blending (E5), which should come into effect on October 15, but has gone further to acquiesce to a lobby for 10% ethanol mandatory blending (E10).

The senior government officials said Green Fuel dangled the agriculture funding carrot if government agreed to increase blending from the current mandatory 5%.

Zimbabwe needs more than US$1 billion to fund agriculture and rehabilitate infrastructure on the farms.

According to senior officials at the Zimbabwe Energy Regulatory Authority (Zera), government has agreed to increase mandatory blending to 10% with effect from October.

“What has happened is that we are now moving to E10 by end of October,” an official said. “We are going to insist that all service stations label it is E10 and by end of October, there will just be leaded petrol and E10 on the market. “Anyone caught selling unleaded petrol at that time will face criminal prosecution. We have put in place a system which will ensure that by next week none of the service stations will receive unleaded petrol. The National Oil Infrastructure Company of Zimbabwe will not release unleaded petrol to service stations. Whatever unleaded petrol that comes through the pipeline will be blended first before release.”

Rautebach’s Green Fuel has a monopoly in ethanol production, so an increase to 10% blending would result in huge profits for the company.

There is even a proposal by the Ministry of Energy to increase the blending to 20% by February 2014.

It has emerged Mugabe was also swayed by his lieutenants from rival factions led by Vice-President Joice Mujuru and Justice minister Emmerson Mnangagwa, who joined forces in vigorously pushing for mandatory blending in high level government meetings.

“There was a strong push, first from the Mnangagwa camp and then strongly from Mai Mujuru and her close allies,” said a senior government official.

“But President Mugabe never relented in those meetings. He strongly opposed mandatory blending and always questioned why we should make laws that benefit individuals which would set a bad precedent. He always asked why we should do this for Billy. He was also worried about Zimbabwe’s capacity to supply enough blended petrol to meet demand. He was wary of a situation which will lead to shortages, given Zimbabwe’s history in that regard.”

Zimbabwe has in the past experienced severe fuel shortages due to factors including foreign currency shortages.

The official added: “Mugabe must have eventually balked at the pressure and the sweetener that Green Fuel dangled by undertaking to fund agriculture. Mandatory blending was not a GNU decision but is something done outside cabinet.”

Zimbabwe consumes an average 1,5 million litres of petrol a day, but consumption continues to rise owing to an increase in cheap car imports, especially from Japan.

Although mandatory blending at 5% ethanol levels is supposed to be effected by next week Tuesday, unsuspecting motorists are already buying E5 and E10.
A survey by the Zimbabwe Independent revealed that most service stations were selling only E5 and E10 without informing motorists about the product they were purchasing.

The E5 and E10 is being sold at the same price as unleaded fuel at between US$1,50 and US$1,52 a litre, and there is no labelling to differentiate between the two at most pumps.

A petrol attendant at a city service station said: “We started selling only E5 a long time ago. It’s only if or when you ask whether it is unleaded or E5 that we tell you. Otherwise we just ask people if they want petrol or diesel.

An attendant at another service station said: “I don’t know if it’s E5 or E10 but I only know that it is blended. Because we are using the same pumps we used for unleaded fuel, people assume that they are buying unleaded fuel. So many people have been unknowingly using E5 in their cars for weeks now.”

Research indicates that ethanol can negatively affect electric fuel pumps by increasing internal wear and undesirable spark generation.
Another weakness is the fact that fuels with more than 10% ethanol are not compatible with non E85-ready fuel system components and may cause corrosion of ferrous components.

Research has also indicated that vehicles with a carburettor are not suitable for E10.

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12 Responses to Mugabe gives in on ethanol blending

  1. The Patriot October 11, 2013 at 12:30 pm #

    Yes, why must we always do it for Billy? An open case of one individual blatantly corrupting government officials.

    Besides consumers should choose what to use in their respective vehicles.

  2. Terry M October 12, 2013 at 12:01 am #

    Banana republic…..

  3. Mutadza October 12, 2013 at 4:58 am #

    If Billy gets 10% of the fuel cost what makes him different from the drug barons of south America as the de facto ruler of this country

  4. Spencer October 12, 2013 at 5:31 am #

    Well I must give it for his excellency. Its unfortunate that diamonds don’t seem to be able to fund the agricultural season, but for what its worth, his excellency should look at the benefits which are going to accrue to Ngwena and that Lady vice of his. I smell corruption because money is the only blender of sworn enemies

  5. Zvazviri October 12, 2013 at 7:24 am #

    You all seem to forget that in fact ARDA is a 50 % shareholder in greenfuel!

  6. BobZim October 12, 2013 at 10:47 am #

    Hippo the listed agricultural concern also has capacity to produce ethanol so its not only Billy who will benefit here. Arda will also benefit!

  7. Mbongeni Sakhe October 12, 2013 at 10:49 am #

    Really, Arda 50 % shareholding? Did this paper not report not long ago that the deal was renegotiated giving the state 51 % as per indiginisation laws?

  8. njm October 12, 2013 at 8:34 pm #

    Surely why should we people of Zimbabwe always on the receiving end, we definetly know that ethanol is a product of sugar and if you pour sugar in your petrol tank it ceases the engine, dispite what ever proportion we may accept the truth is we are not very sure about the effects. Our presindent has a point and i am in his support. Why should we be forced to use what we dont like . Its really paining me because i am a citizen of a country where i dont have a choice. My presindent help us here we can’t afford to lose our hardly found vehicles. If i had money i was going to opt for a deasel engine . Sure what is happening to our leaders whom we voted to government to represent us not sacrifice for the love hidden agenda
    Concerned motorist

  9. chief JS October 13, 2013 at 9:01 am #

    SAVING BILLBOY,WISH SOMEONE COULD TAKE THIS GUY TO SA THEY NEED MORE THAN WE DO HE IS VERY MUCH AWARE OF IT.

  10. Mukorekore October 13, 2013 at 2:36 pm #

    Why are Zimbabweans so naive? You think its Billy Ruetenbech behind Chisumbanje Ethanol Plant? Hey wake and smell the coffee. We are not fools come on guys! Someday, it will catch up with someone somewhere

  11. Zimbo@heart October 18, 2013 at 11:45 am #

    One minute you say Greenful is owned by Billy the next it is a joint venture with Arda??? However I still think motorist should be given an opportunity to choose and the Gvt can reduce taxes on green fuel to encourage uptake and make it competitive. The economy is being uplifted as a whole never mind who is pioneering.

  12. George October 21, 2013 at 10:55 am #

    Not even this Government is stupid enough to give our New Farmers 1 billion for next years crop. The maths is simple,

    Ministers – 1 billion
    Farmers – zero
    Zimbabwe Citizens – pay the loan back by buying fuel

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