Ethanol blending benefitting a few: Mangoma March 30, 2014 in NewsDay by Ndamu Sandu
FORMER Energy and Power Development minister, Elton Mangoma has said mandatory ethanol blending is shrouded in secrecy, spiced with lies and benefitting a few individuals at the expense of ordinary Zimbabweans.
Government introduced mandatory blending last year starting at E5 (5% ethanol and 95% petrol). It said blending was encapsulated in the energy policy meant to reduce dependency on imported fuel, enhance security of supply and create employment, among others.
The mandatory blending doubled to 10% before being increased to 15%. It was cut back to 10% after the sole ethanol provider in the country, Green Fuel failed to meet the demands of the market.
Speaking a stakeholders’ meeting convened by the Employers’ Confederation of Zimbabwe (Emcoz) on Friday, Mangoma said mandatory blending was “surrounded with controversy, lies and conjecture, with many trying to hide the facts as far as possible”.
“You are taking money from public pockets and putting it into someone else’s pocket,” he said. “This means that you cannot let an individual benefit by forcing people to buy a product that has failed to find traction on the market.”
Billy Rautenbach controls Green Fuel through his companies Macdom and Ratings.
A growing number of motorists have said blended fuel is damaging vehicles that are not compatible with such fuel. They say blended fuel should be available as an alternative to fossil fuels and consumers must be allowed to make choices.
Blended fuel has also brought an extra cost as ethanol has a lower calorific value as compared to petrol.
The calorific value is the power one gets from either petrol or ethanol. For instance, 10 litres of ethanol is equivalent to 7, 2 litres of petrol.
“You bring pain to the villagers and motorists so that a few producers of ethanol are happy,” Mangoma said. “Green Fuel said it would bring catalytic convertors. It never brought them.”
‘Country saves US$90m from blending’
Zimbabwe Energy Regulatory Authority (Zera) chief executive officer, Gloria Magombo says blending is not a new thing as it has happened before.
She said blending came as a result of the increased uptake of fuel since 2009. Fuel imports nearly doubled to 523 536 306 litres last year from 288 344 423 in 2009.
She said as a result of the 10% blending, the country saved US$90 million.
But Mangoma maintained that the country had not saved any money as there were other costs arising from the use of blended fuel.
“Those are false savings because when my vehicle develops a problem, I will have to import spare parts,” Mangoma said.
A representative of the Motor Industry Association of Zimbabwe, Simplisio Shamba said government should approach the matter with caution, advising them to take one step at a time.
“Government should issue a Statutory Instrument on the types of vehicles to be imported. When they come, we can go to E20,” he said.
Magombo said in the long-term, government had to put in place deliberate policies on the types of vehicles to import. This means that vehicle dealers have to import cars that conform to local fuels.
“It is important that in future we come up with incentives which allow the importation of vehicles which conform to local fuel,” Magombo said. “This is where we should be going as a country.”
The ethanol plant in Chisumbanje has in the past courted controversy over its valuation. Promoters have said it is valued at US$600 million.
Mangoma however, said the plant was nowhere near the US$600 million touted. “Where there is US$600 million, you can see it. You don’t need to be told,” he said.
According to the national energy policy, a minimum of E20 blending should be in place by 2015.
The increase in the blending ratio comes despite concerns by car assemblers that their vehicles won’t take anything above E10.
Last year, Nissan Zimbabwe said the use of the ethanol blend above 10% would render all its products unwarrantable as they were designed to take a maximum 10% of ethanol blended gasoline only.
Concern has also been raised as to why government was shutting out other players.
Magombo said any company interested in producing ethanol for the local market should be in a joint venture with government.
COMMENTS
The mafia with Bob and Mnangagwa at the top are benefiting. They run their own parallel revenue stream to finance their nefarious activities.
fatten their external bank balances.
This will not change even though they are running government. They can always blame Chinamasa for the poor revenue collection in government .
Things will surely fall apart.
Mbavha.
This energy lady expert must research before uttering nonsense on a subject she has limited knowledge of.The so-called fuel bill saving is what the public is paying extra for the blended fuel which gives you less mileage per litre since its chemical composition is changed in the form of octane value.To explain it further in layman’s language the trip which used to cost you about $50 on fuel with your car doing say 12-13 km per litre will now cost you more than $55 because your car will now give about 10-11 km or less per litre.
To compensate for this low mileage and general damage to the engine and vehicle fuel rubbers the price of blended fuel should drop to about $1.39 per litre not above $1.44 per litre.We are deliberately being robbed by this ethanol company.It is really criminal to try and blend more than 10% because internationally they have accepted that the current unmodified vehicles cannot take blended fuel of more than 10% without serious vehicle failures.The problem we face in this country is that we have a government which does not want to listen to logical approach to issues affecting its populace.Why?
We should not think our cars are similar to those in Brazil which are specifically designed for 100% ethanol use.The so-called advantages of blended fuel even at 10% are out weighed by the numerous disadvantages in the current vehicle optimum usage.
The danger of appointing deadwood as authorities in government. Hw can grain and other cereals be enough with Made sitting as the minister of Agriculture? Shame! What kind of president would put a failed brat as minister of agric?
Mixed race, you are giving better reasons than mangoma.if mangoma had given those kind of reasons i think this blending was not going to be implemented.instead he just generalises everything without giving facts, u cant see value, you have to do a proper valuation, even if the valuation is low, are we benefiting?i think mangoma is dull.
Yaa but bottom line is our car are breaking down individuals are benefiting at our expense , again looting mechanism .
Unfortunately I Agree with loveness. Mangoma wants always to have his cake and eat it. Mangoma is motivated by hatred than good intentions. That is why he stands accused of initiating boardroom coups. How does he reconcile his ability to work with Roy Bennett who killed blacks during the war of liberation and simply fail to accommodate Billy Rautenbach because he supports Zanupf. Is it because Billy is a Jew? Such an atitude will tear this country apart.
Yet I totally disagree with the principle of compulsory blending that was adopted by Cabinet when the energy ministry was Mangoma under his watch anyway. It does not matter on which side Mangoma stood in that Cabinet he cannot run away from the responsibility of arguing his case as minister responsible all the same. Issues are brought to cabinet by responsible ministers. Elsewhere the same Mangoma blames his former boss, Tsvangirai for the miserably crafted GPA framework when we all know that it was Mangoma and Biti who represnted their party as negotiators.
However, people must have a right to choose the fuel they think is best for their purposes. For those who are au fait with economics his former ministry’s actions of allowing compulsory blending is bad for the economy as it promotes monopolistic practices and price ring cartel of sorts.
In addition Cabinet ‘inadvertently’ took away future water rights for the many people who live on the save valley by this simple decision of elevating this project to a compulsory status. Again this is attributable to the inability of the former energy minister to argue his case.
The ethanol project cannot be said though to have no merits. Ethanol blending is in place Brazil where over 11% of the gasoline fired vehicles are voluntarily on E20.
We should also not lose sight of the factor that the ethanol project has created 4500 jobs in chipinge district that has impacted on the incomes of the locals there. Whereas previously the dust bowl called was the poorest with virtually all the people living on an income of less than $72 per year now there is a potential to raise the incomes of 4000 families eight fold to $600 per year. So let Mangoma’s cheap politics keep away from the common man’s plight.
@Mandy-you are missing the vital points,no one is against ethanol production but its how it is being blended to the fuel which will cause serious damages to the vehicles.You wrongly quote Brazil because there they have a definite policy in having 100% ethanol powered vehicles, but internationally they currently sticking to about 10% blending which is reasonably safe for the current unmodified vehicle engines.There is still long term damage even at 10% blending.
In your opinion you think this project has created jobs but is it right to abuse its product to financially kill the other sections of the economy.After all this project is exploiting the masses if he is paying them below the domestic wage of about $90 per month,this is slavery not work.You mention these disgusting figures with no shame.What kind of a person you are?These poor people are better off tilling their land than being abused legally by this foreigner for his benefits.Therefore we should now be paying about $1.25 per litre of blended fuel since they are using slavery labour which costs them nothing.These villagers risk their lives from snake bits etc for $50 per month-shame on you.I am a pensioner but I pay my domestic worker $100 per month plus other allowances.
I tend to agree with mixed race. When you intend to develop a new project from a one that is already existing, you do not just look at the cost and benefits for that new project only. Rather you also have to look at the benefits that are lost in discarding the old system/project and the cost that are foregone in discarding that old project or system. In essence the formula for determining desirability would be as follows; [New benefits from E10 + Cost (foregone) of 100% petrol/old system] LESS [New cost from E10 + Benefits of 100% petrol]. When you are looking at the benefits for both the old system (100% petrol) and new system (E10) you look at the benefits to the public in terms of using the fuel, benefits to the state in term of revenues, benefits to the fuel industry in terms of profitability and competitiveness. In the same manner when you are looking at cost you look at the cost to the public, cost to the state and cost to industry. It has to be holistic not just looking at one sector. As it stands with the evidence currently available it is most definite that the new system (E10) is less favourable than the old system (100%)at the current price for E10 when all sectors are assessed for benefit and cost.
Blending petrol with ethanol will reduce the power available to any car as the ethanol gives less energy to the car engine. Putting it differently, the energy output from a blended gallon of fuel is less that that of pure petrol. Also our cars on the road are designed to use unleaded petrol only. They are now clearly marked that way. Use of ethanol therefore adversely affects engine performance and will thus reduce energy available to the engine and will, over a short period, destroy components of the engine as ethanol is corrosive whilst pure petrol is not. There is a high and hidden cost to using blended fuel and we are paying more in terms of energy and engine performance when we use blended fuel than before. It surprises me to think that in Zimbabwe, we adopt policies that even developed countries do not use. Therefore we are being robbed through this outdated policy. Those who sell us our fuel, surely should be given the choice to sell blended or un-blended petrol. We deserve better, we are buying our petrol with our foreign currency, why should we be forced to use blended petrol. Where is the argument that we are saving foreign currency coming from? Shows we have the totally blind leading us in this poor nation of Zimbabwe.
This is all true that is why ethanol should be sold at around $0.60 per litre at the pump and the and one could make their own mix depending on their type of vehicle and see how popular it really is