14 February 2013

Zimbabwe: Mandatory Fuel Blending Rules Gazetted

GOVERNMENT has gazetted regulations making it mandatory for all licensed oil companies to sell petrol blended with a minimum of 5 percent of locally-produced ethanol. The move, it is hoped, will bring relief to motorists in the wake of a recent increase in fuel prices.

Blended petrol prices in Harare have been ranging between US$1,54 and US$1,59 amid indications that the prices might rise further as weather conditions turn for the worse in Beira, the source of fuel imports into Zimbabwe.

According to Statutory Instrument 17 of 2013 published on Tuesday, E5 to be produced by licensed ethanol blenders, will be introduced throughout Zimbabwe.

The Petroleum (Mandatory Blending of Anhydrous Ethanol with Unleaded Petrol) Regulations were gazetted by Energy and Power Development Minister Elton Mangoma.

Asked when the regulations come into effect, Minister Mangoma yesterday said it all depended on when the Chisumbanje Ethanol Project or any other ethanol producing company becomes compliant.

Production of ethanol at Chisumbanje stopped last year and a Ministerial Task Force has since recommended that the future of the project would be guaranteed if they enter into a joint venture with Government.

There has been a slow uptake of E10 fuel on the market which led to a huge stockpile of ethanol at the Chisumbanje plant.

Economic analyst Mr Witness Chinyama applauded the introduction of mandatory blending.

He said it was a positive development that would see Zimbabwe reduce its fuel import bill and free funds for other projects of national interest.

"Mandatory blending will have a positive effect in that it will reduce the price of fuel and Zimbabweans will benefit in the long-term," he said.

The new regulations make it clear that no procurement or wholesale licensees shall sell unleaded petrol unless it has been blended with at least 5 percent ethanol.

In addition, no person other than a licensed ethanol blender shall blend anhydrous ethanol with unleaded petrol.

The regulations also restrict the procurement of the ethanol from only licensed ethanol producers.

"No licensed ethanol blender shall blend anhydrous ethanol with unleaded petrol except at a facility specified in the blender's licence," read part of the regulations.

Producers will also be required to make submissions to the Zimbabwe Energy Regulatory Authority specifying that the ethanol used is compliant with set standards.

They will also provide monthly returns on the volume of ethanol produced and to who it was sold and the volumes sold to each of them.

The blenders are also equally expected to provide Zera with weekly returns on the volumes and names of the source of the ethanol used.

Such records should be readily available when required by Zera officials.

Zera, in consultation with the Energy and Power Development Minister, shall set the price at which the ethanol and the pricing of the commodity shall fall within the set parameters.

"Those found in contravention of the regulations shall be liable to a fine not exceeding level nine and the Criminal Procedure and Evidence Act (Chapter 9:07) shall be applicable for any offences committed."

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