NOW DAILY NEWS ANALYSIS|
Businessman Billy Rautenbach, a.k.a. Muller Conrad, has always had a curious relationship with Zanu PF.
His role as the party’s funder has attracted sanctions from the United States government, the European Union and Australia. His opaque dealings have for decades been the subject of intense speculation among Zimbabweans and the world at large.
However, it is his Greenfuel ethanol project that has riled many.
The announcement last week by energy minister Dzikamai Mavhaire that cabinet had approved an increase in the ethanol content of blended fuel to 15 percent came as a surprise to many motorists.
Mavhaire himself admitted that Greenfuel had no capacity to supply all the required ethanol as part of its sugarcane crop was wiped out by floods. It is fairly obvious that Rautenbach will have to import the deficit at higher prices or buy from Tongaat Hullet, negating the supposed cost benefits of the ethanol mix.
While Rautenbach will smile all the way to the Swiss banks, it is motorists who will suffer from this ill-timed, ill-advised and arbitrary move.
The performance of ethanol blend has been far from satisfactory so far. Motorists have complained that the blended fuel vaporizes too fast, that they do not go as far on blend as they would on unblended fuel. There are even questions about the quality of product produced by some manufacturers. Many are suspected of illegally going above the 10 percent ethanol limit previously approved by the government. Greenfuel itself is making E20, according to its website, perhaps for industrial use and special customers. But with no-one to set production standards or to check at the pump if regulations are being followed, it is up to individual businesses to choose to comply. Many don’t.
The basis for increasing blending levels is not known. Mavhaire said the move will save the country $12 million annually in fuel import costs, which is quite a pittance considering the cost to motorists in auto repairs and lost money. This product costs more to the individual motorist in the long run.
The purpose of governments is to regulate markets and not to impose their will on them. Markets are fragile. The more they are bended to suit the whims of politicians and their friends, the more likely they are to snap.
(c) NOW DAILY 2014.