The National Oil Infrastructure Company (NOIC) says there is no going back on blending despite the obtaining high price of ethanol.
The sentiments come at a time when the public has questioned the relevance of ethanol blending which has pushed fuel prices up in the recently announced fuel pricing structure which has put ethanol price at US$1.10 per litre.
Appearing before the Parliamentary Portfolio Committee on Energy and Power development chaired by Honourable Joel Gabuza, NOIC board chairman, Engineer Daniel McKenzie Ncube said the fact that the prices are high does not mean it is irrelevant, countries are abandoning fossil fuel moving on to green energy. So as a nation we cannot go back to fossil fuel, we are in a global village,” said Ncube.
Honourable Elias Musakwa had questioned why the price of ethanol is high compared to other nations that are charging an average of 50 cents per litre.
“The cost structure of ethanol for blending has become topical in the last days as it increases the price of fuel though we have countries such as Brazil charging US$0.39, United States of America is pegged at US$0.39, Thailand ethanol is pegged at US$0.45, in France it is pegged US$0.60 with Sweden pegging it at US$0.92, we are only below Spain which charges US$1.24, have you gone to interrogate the cost structure of your producer, what can stop the ethanol producer to import and sell at the prevailing price,” questioned Musakwa.
Zimbabwe Energy Regulatory Authority Acting Chief Executive Officer Edington Mzambani said the ethanol price has not changed since 2013 only that it looks expensive owing to the movement of foreign exchange rate.
“There is an outcry on the price of ethanol, but it has never changed for the past 7 years. We are currently engaging producers to submit their cost structure such that we can establish the actual costs.
“Importation of ethanol will actually negate such our biofuels policy which was launched recently as well as the national energy policy. It will also be a negation of the country’s vision of creating employment. If we take out blending it would increase the price in local currency while it would reduce the price of fuel in USD,” explained Mazambani.
The committee members also raised issues regarding the unavailability of fuel on the market which NOIC said there has been no change in the amount of fuel coming into the country.
Though ZERA and NOIC couldn’t agree on whether it is cheaper to bring fuel by road or pipeline, with NOIC saying bringing fuel by pipeline cost US$0.8 per litre while by road it is pegged at US$0.7 per litre.
“Our pipeline has the capacity to pump six million litres a day with an option of improving the technical side to boost that capacity. We have the biggest storage of fuel in the country and we can turn the country into a fuel hub thus utilising over 500million litres of storage, very secure and high security,” explained Ncube.