eBusiness Weekly
Hebert Zharare
The price of petrol has shot up to $1.48 per litre in some cities and towns on the back of acute ethanol shortages after the Green Fuel plant failed to resume operations on time following an annual shut down shutdown last year, Business Weekly can reveal.
This has resulted in most service stations nationwide selling 100 percent unleaded petrol on inflated prices above Government prescribed $1.35 per litre for petrol.
A senior Green Fuel official who declined to be named in written responses on Thursday, confirmed the latest development.
It also emerged a stop-gap measure for Tongaat Hullet to supply the commodity from its surplus was made to allow Green Fuel to recover and start supplying the commodity by May 15.
Zimbabwe has a mandatory blending ratio which is pegged at 20 percent but fluctuates from time to time depending on supply. At present, the current required blending ratio is at 5 percent.
However, the latest ethanol shortage, has seen fuel dealers selling 100 percent unleaded petrol to motorists at prices ranging between $1.37 and $1.48 per litre for petrol depending on location.
In May last year Government ordered players in the petroleum industry to reduce fuel prices with to $1,35 per litre for petrol, $1,23 per litre for diesel and $1,17 for paraffin following the reduction of duty.
However, in a snap survey this week some service stations in Harare were selling petrol for $1.40, in Bindura $1.39, Karoi $1.39, Gweru $1.48, Beitbridge $1.38 while in Bulawayo it was selling for between $1.40 and $1.43 per litre.
Said the Green Fuel official; “While we cannot comment on whether or not fuel stations are selling unblended fuel, we can tell you that the ethanol factory has been shut down for its annual maintenance (this occurs every year during the rainy season) and thus we are currently not producing ethanol.
“Normal supply is expected to re-commence mid-May. With re-commencement of ethanol production and blending (at 20 percent), the petrol pump price should come down (by +/- 6 cents). The short supply has been caused by the unusual late rains, which has meant that the stock reserves built up were not able to carry us through the maintenance period.
This will not be a problem going forward as we expect to increase production from 54 million litres last year to 70 million litres this year, and then again to 90 million litres in 2019 with the expansion of our sugarcane fields and ethanol plant. Thus, stock reserves in future should be able to carry us through the maintenance period, even if we have late rains or delays in the maintenance programme.”
The official said the poor state of the A10 road also hinders ethanol production as delivery to the mills was affected.
“We have requested Government to rehabilitate the road (in particular the portion between Middle Sabi and Chisumbanje) but it has not been done to date,” he said.
Chipinge South legislator Enock Porusingazi, who also attends meetings at Green Fuel, confirmed the shortage, but was quick to dismiss reports of the company’s incapacity to supply the commodity.
“When they started in 2009, they were at 20 percent capacity and now they are at 80 percent. When they have challenges like this, Tungaat Hullets move in to supply ethanol for blending. But from the 15th of this month they will start supplying ethanol from their fields. This is not a failure to produce ethanol, it’s a new project that is still developing.
“You know fully well that Green Fuel is developing and they have reached 100 percent capacity. They are still increasing their hectarage as a company. Mind you sugar cane takes time to mature. In rain season there will be no harvest. Give them a year and they will be able to satisfy national requirements,” he said.
Green Fuels is a joint venture between Mr Billy Rautenbach’s Ratings Investments and state-owned Agriculture Rural Development Authority (Arda) at the latter’s estates in Chisumbanje, Manicaland province.
Arda chairman Basil Nyabadza, however, could neither confirm nor deny the report on Thursday, adding he was going to investigate the matter.
Green Fuel spokesperson Lillian Muungani confirmed receiving the questions on Wednesday, but did not respond by time of going to press.
“I have sent your questions to managers who are handling the matter. They have a lot of things to do and I cannot promise if the responses can be ready today,” she said.
