E5 mandatory blending hailed
Blessing Bonga Business Reporter THE recent introduction of E5 mandatory blending has been described by some economic analysts as a positive step towards a subsequent reduction in the price of blended fuels including E85 that was introduced early this year and now selling at US$1,10 per litre compared to an average of US$1,50 per litre for unleaded petrol while fuel dealers feel the price is justified at US$1,10 per litre. Economic analyst, Mr Witness Chinyama said the introduction of E5 mandatory blending would guarantee ethanol producers especially the recently licensed Green Fuel (Pvt) Ltd a ready market and this is likely to trigger the demand for sugar cane to meet the country’s ethanol requirements. “Now that mandatory blending has been introduced, ethanol producers have a guaranteed market and therefore sugar cane farmers would have to up their production to meet the ethanol producers’ demand.
“I think as mandatory blending has just been introduced, with time ethanol producers would improve on their current capacity utilisation which will see prices of blended fuels stabilising or even coming down below the prevailing average of US$1,10 per litre, the same scenario witnessed in terms of pricing during the period Government introduced the multi-currency regime,” he added. However, Comoil managing director, Mr Lovemore Mazero, feels the US$1,10 per litre pricing is fair taking into consideration that there are also costs that come in the production chain regardless of the fact that 85 percent of the final product is produced locally.... Read the full, comprehensive news article and discuss at The Herald