Ethanol plant halts production
01/04/2012 00:00:00
by Staff Reporter
THE US$600 million Green Fuel ethanol plant in Chisumbanje has ceased
production after running out of storage space as the company struggles to
push its product on the local market.
State media reported Sunday that Green Fuel has also been forced to sack 230
employees after production ceased at the plant.
The company is selling E10, a blend of 10 percent ethanol and 90 percent
petrol but motorists have remained reticent, apparently concerned about
possible damage to their vehicles and the product’s pricing.
A litre of E10 is retailing at an average price of US$1,41, marginally lower
than the US$1,44 for unleaded petrol.
“It is of no use to have our own product costing almost the same as the
imported one. Motorists think it is rather absurd to switch from what they
were used to and try another product for no reason,” Harare economist Machel
Mawerera told the Sunday Mail.
“The price should have been less than a dollar per litre.’’
Company officials said the government should introduce mandatory blending to
rescue the project which was expected to help reduce the country’s fuel
import bill.
Said assistant general manager, Raphael Zuze: “I do not agree that motorists
are resisting our product because of the price. It is just a belief which
has been created that needs to be eradicated.
“We are asking the authorities to make it mandatory for every fuel importer
to use our ethanol to blend what they import.
“Once that becomes mandatory, we will see how much the country saves in
terms of foreign currency which can then be used towards other pressing
issues.”
He said increasing the blending ratio from the current 10 percent of ethanol
would help reduce product price.
“We are introducing ourselves slowly and we are going to increase the ratio,
but we can only do that with a guaranteed mandatory blending licence,” he
said.
“This will help us to determine what our market needs. It is true that if we
go up to between E15 and E25, the price of fuel will definitely go down.”
However, motorists with older vehicles would need to be fitted with
converters in order to use either E15 or E25.
“The converter changes the fuel-air ratio. Depending on the car, most of the
local vehicles require converters to use anything between E15 and E25,”
factory manager Peter Glaum said.
“That is why we started at E10 because we were not sure of the state of the
local cars.”