No ethanol back-up: Mavhaire

via No ethanol back-up: Mavhaire – DailyNews Live by Kudzai Chawafambira  21 JANUARY 2014

Energy minister Dzikamai Mavhaire has admitted that government in its joint venture with Green Fuel had no backup plan in case of shortages of sugar cane for ethanol production.

This comes as Green Fuel’s ethanol stocks diminished resulting in government backtracking on its December decision to revise upwards its mandatory ethanol blending levels to E15 from E10.

“I buy your argument that we should have had a strategic reserve, that’s what you are trying to say,” he said in response to question about back up plans to mitigate ethanol supply shortages during a press conference on Wednesday last week.

“However, we do plan every year… we throw in a lot of seed in the ground and unfortunately when we don’t have the rains, nothing happens.

“So in this case if it was last year, we could have been in a normal situation so you are the only one together with God to say the rains are coming or not.”

The country could experience intermittent fuel supplies as ethanol stocks are thinning.

There is raising concern about the judiciousness of the August 2013, policy, which has precipitated a constitutional challenge about the rationality of the move and other issues including compatibility of the fuel to certain cars.

Although Mavhaire has tried to downplay the potential crisis, saying they were attributable to “recent rains that have made it impossible to harvest cane for ethanol production”, industry insiders said Green Fuel’s woes were bigger, including an alleged lack of planning. “This supply strain resulted in the stocks that had been anticipated to take care of inevitable short production interruptions being reduced to very low levels,” he said.

Crucially, South African-owned Triangle — a low-level and not fully licensed producer — has been roped in to “put some of its ethanol on the market for three months”.

“These measures have been taken to ensure consistent availability of blended petrol,” the Masvingo senator said.

Although President Robert Mugabe’s government had introduced a five percent mandatory blending in August last year, it quickly up rated the ratios in support of the $600 million project.

As things stand, Mavhaire had already planned to raise blending levels up to 20 percent by March this year, despite growing concerns over the ethanol fuel’s effects on certain cars and that garages would not provide warranties beyond 10 percent.

As it is, Thabani Mpofu’s Constitutional Court (ConCourt) application is not only based on challenging the pricing and anti-competitive nature of the deal, but that there was no scientific research to back up its justification.

In November, Information minister Jonathan Moyo launched a scathing attack on the policy, saying that government had potentially erred in effecting it.

“Sometimes when policies are made, it’s because certain powerful interests are influencing that policy and the powerful interests are not always political, sometimes they are the business ones which will be seeking an advantage over others through their connections with policy makers and so forth,” he said in response to a National University of Science and Technology student.

“Sometimes it’s because at the material time, when the policy is made, people might be pre-occupied with other things… and allow a funny policy to be made and hope to come back to rule again and then take care of the policy,” Moyo said.

“Sometimes there are genuine circumstances where the information is incomplete, and the information becomes complete as the policy is being implemented.

“Policy implementation is policy making, because you can refine now that you see what is happening.”

“On the basis of what you say, and using the reasonable person standard, it (mandatory blending) doesn’t sound right. It can only happen in a country where people don’t even make cars.”

While Mpofu has cited Mavhaire, the Zimbabwe Energy Regulatory Authority (Zera) and Green Fuel, he chiefly argues that the policy entrenches a monopoly and the blending ratios are not in the interest of motorists.

In the ConCourt application, the Harare man said the net effect of compulsory blending was crowding out other products and constituted a violation of the people’s fundamental right “to freedom of choice”.

His lawyers say the three respondents have failed to provide a reasonable explanation for the accelerated blending ratios and, thus, an “inescapable conclusion that the whole programme was driven by greed” arises.

“The issue of pricing has a further Constitutional dimension which on its own justifies the setting aside of the regulations,” he said, further querying why all operators were being forced to procure ethanol from one source.

“Triangle in the Lowveld is producing anhydrous ethanol which it is being allowed to export for a price of around $0,60. Surely, the licensed traders and blenders ought to be allowed to purchase from such a company or others,” Mpofu argued.