ZIMBABWE’s fuel dealers and motorists are demanding a review of the wholesale price of locally-produced ethanol, currently pegged at US$1,10 per litre, which they say is unsustainable and exorbitant.
This outcry follows the government’s introduction of Statutory Instrument 150 of 2024 in August last year, which mandated the blending of ethanol with unleaded fuel before it is sold to motorists.
While the move was intended to promote the use of locally-produced ethanol, its pricing has sparked widespread criticism.
Despite being a domestic product, ethanol is exclusively priced in US dollars, placing an additional financial burden on fuel dealers and motorists.
Comparatively, in countries such as Brazil, India, Kenya, and South Africa, ethanol serves as a cost-effective alternative to fuel imports. In Zimbabwe, however, the high cost of ethanol undermines its potential as an affordable substitute.
“We need to look at this ethanol so that the economy can benefit properly. Let us have a fair price for it and be fair also on the currency that is used to buy ethanol,” Direct Fuel Importers general secretary Bart Mukucha told businessdigest.
“If there is a request for the price, for the amount to be split into half US dollar, half local currency, that will be good. The current pricing is unsustainable. Let us be fair to the motorist and to the producer of ethanol.
“We love the fact that we produce ethanol. We support that industry, but it must be fair to the consumers. There must be some meeting point that is amenable. Not this extortion that we see in broad daylight.”
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He added that ethanol was introduced for job creation and saving foreign currency by substituting imports.
This is because by blending ethanol with imported fuel, this reduces the foreign currency needed for importing fuel.
“We should use our own local currency to buy that ethanol. It is a nationally-produced product. There is no reason to pay US dollars for it in full. So, it should be sold in local currency primarily,” Mukucha said.
Green Fuels, the leading local ethanol producer, is co-owned by tycoon Billy Rautenbach and the Agricultural Rural Development Authority.
Mukucha suggested a split pricing system, with half the cost to be paid in US dollars and the other in local currency.
Motor Industry Association of Zimbabwe president Lawrence Nyamushanya said the fuel sector would have a meeting “soon” with the Zimbabwe Energy Regulatory Authority (Zera).
“This is one of the thorny issues on the agenda. I will give you feedback once that meeting is held,” he said.
Zera chief executive officer Edington Muzambani defended the ethanol pricing.
“Ethanol is a biofuel which, in Zimbabwe, is produced from sugar cane through a process completely different from the production of petrol, which is produced from fossil fuels,” he said.
“The differences in the substances create differences in terms of the final cost.”
