- TotalEnergies Hwange faced penalties for blending over the legal ethanol limit of 20%
- Fuel taxes and levies in 2024 stood at $0.510 for diesel and $0.5370 for petrol, contributing to high price
- There is a pressing need for consumers to have the option to purchase 100% petrol
- A reassessment of blending regulations and tax reductions is necessary to support consumers and local production
The Current Fuel Landscape
Harare- Recent developments in Zimbabwe’s fuel sector reveal significant challenges and raise critical questions about the efficacy of existing government policies. A notable incident occurred at the TotalEnergies Zimbabwe service station in Hwange, where the company faced penalties for exceeding the legal cap of 20% ethanol blending by mixing unleaded petrol with over 25% ethanol. This incident highlights the complexities of fuel blending regulations and their implications for consumers and businesses alike.
The legal requirement for blending ethanol into fuel is typically set at 20%, but this figure can drop to as low as 10% when local ethanol production is hampered by maintenance or supply shortages. Local producers, such as Greenfuel Energy and Triangle, often undergo annual maintenance, leading to diminished supplies and forcing service stations to exploit blending allowances to meet demand.
Financial Strain on Consumers
As of 2024, fuel taxes and levies have reached $0.510 for diesel and $0.5370 for petrol. These high taxation rates significantly inflate final pump prices, which peaked in April 2024 at $1.69 per litre for petrol and $1.69 per litre for diesel. Despite the total landed cost of fuel being under $1.00 per litre, Zimbabwe currently faces some of the highest fuel prices in Africa, with petrol costing $1.48 per litre, compared to Egypt's low of $0.30 per litre. This stark contrast places immense financial strain on consumers and businesses.
Consumer Choices and Engine Health
One of the pressing issues is the lack of choice for fuel users. Consumers should have the option to purchase 100% petrol without being compelled to use blended fuel. The current regulations inadvertently encourage service stations to exploit blending ratios, leading to increased costs and potential harm to vehicle engines. Supporting local ethanol production is essential, but it should not come at the expense of consumer choice or vehicle health. Ethanol producers must innovate to meet market demands while maintaining quality standards.
A Call for Change
In light of these challenges, it is crucial to reassess the current fuel blending regulations. A reduction in taxes and levies on fuel could alleviate some of the financial burden faced by consumers. By allowing consumers the freedom to choose their fuel type, Zimbabwe can foster a competitive market that prioritizes efficiency and protects engine integrity.With a balanced approach that supports local production while ensuring consumer rights and vehicle health are safeguarded, Zimbabwe can navigate the complexities of its fuel sector more effectively.
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