NOIC targets October for $6m ethanol depot

Published: 05 September 2017

THE National Oil and Infrastructure Company (NOIC) is targeting to complete its 3 million litre ethanol storage facility in Harare next month as it readies for higher petrol blending ratios meant to reduce imports.

Increased ethanol storage capacity from the $6 million facility, will enable Zimbabwe to stock up more and sustain higher petrol blending thresholds, after Government recently increased the ratio from 15 to 20 percent. Zimbabwe, which requires $45 million monthly to import fuel, has in the past been forced to review its mandatory ethanol blending thresholds due to stock outs caused by rainfall disruption to cane harvesting.

This, however, comes against the background where the country is experiencing serious foreign currency challenges due to an array of competing critical needs with external payments arrears of $180 million.

Zimbabwe obtains ethanol from a $600 million sugar plant in the southeast of the country, which is jointly owned by Government and private investors. The plant has capacity to produce 250 000 litres of ethanol a day. Between December and April every year, sugar cane harvesting is suspended to enable maintenance of the Chisumbanje ethanol plant, which results in Government relaxing thresholds for petrol blending.

NOIC vice board chairperson Air Commodore Innocent Chiganze, said the ethanol depot, part of three fuel storage projects being undertaken by the State petroleum company, was critical to prevent stock outs.

"In terms of ethanol, as we are blending our fuel, there should be enough stocks for blending to maintain the 20 percent blending threshold. "There should be enough of the product so that we are consistent in the type of fuel we dispense," Air Commodore Chiganze to The Herald in an interview recently.

The ethanol plant is part of three projects, which entail construction of a 2 000 tonnes LP gas storage facility in Mabvuku, Harare and Jet A1 storage facility at the Harare International Airport.

"We should have strategic stocks; remember there once were shortages some time back, going forward people are going to need LP gas, more people is migrating to LP gas. On the issue of Jet A1, we had stock out and it is embarrassing, to say we have run out of stocks when there is a market," he said.

"If we are saying that we want to secure the security of fuel in this country Jet A1 is part of them, therefore, we want to have our foothold in the industry, private players yes, but we must compete with them. We need to guarantee Government that we always have ethanol to avoid stock outs," he said.
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