Zim faces fuel crisis?

via Zim faces fuel crisis? – DailyNews Live  14 JANUARY 2014

Zimbabwe could experience intermittent fuel supplies as Green Fuel’s ethanol stocks are thinning, thus exposing the folly of government’s mandatory blending policy.

This comes amid rising concern about the judiciousness of the August 2013 policy or directive, which has precipitated a constitutional challenge about the rationality of the move and other issues including compatibility of the fuel to certain cars.

While Energy minister Dzikamai 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, adding ethanol blending levels had thus been reduced E10.

Crucially, South African-owned Triangle — a low-level and not fully-licenced 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 uprated the ratios in support of Billy Rautenbach’s vaunted $600 million project.

As things stand, the skint government wants thresholds to be raised to 20 percent by March this year, despite growing concerns over the ethanol fuel’s effects on certain cars and that garage 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,” Moyo said.

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.

Zera and Green Fuel had not responded to written questions by time of going to print last night.