BLENDED FUELS, ANOTHER OPTION TO REDUCE FUEL PUMP PRICES IN ZAMBIA, COMING
We are still on course to have blended fuels in Zambia soon. The delay in having blended fuels sold in Zambia has been caused by two factors:
- The pricing mechanism for the blended fuels was still being developed by The Energy Regulation Board (ERB). They are now done and details will be availed to the public shortly. This will trigger the actual modelling of fuel blending and the roll-out of blended fuels in Zambia.
- We have been conducting studies to check and calculate the optimum blending ratios (optimum percentages of ethanol and petrol, for example) for Zambia considering the climate we have and the kind of vehicles we have on our roads. Ivariably, ERB had to develop and approve the technical specifications for blending fuels in Zambia.
As a nation, we have to look at the direction of blended fuels for economic, social and environmental reasons, which include energy security, as ethanol blends increase the fuel pool of the country and reduce unleaded petrol imports into the country thus saving foreign exchange.
When opening the 2nd session of the 13th National Assembly, President Hakainde Hichilema said that INDENI shall no longer be processing crude oil but shall be producing locally produced blended fuel, whereby ethanol will be mixed with finished products to create a ready market for blended fuel and reduce cost of imports for fuels.
I have since reported previously that this is being actualised and INDENI is this soon expected to start blending locally produced ethanol with petrol. Indeni Petroleum Refinery Company Limited ceased to operate as a refinery and it is now a new company that operates as an Oil Marketing Company (OMC). As promised by President Hakainde hichilema, all former employees of Indeni have since been paid their dues. All the liabilities the former company owed will be cleared. Further, the INDENI has already gotten the license to become an oil marketing company. Further, Indeni in partnership with ethanol producing companies, will start blending petrol and ethanol at 10 percent. The blended fuel shall be distributed to a few selected filling stations in Lusaka. If successful in Lusaka, the blended petrol will then be rolled out across the country.
In December 2021, I visited the SURYA Energy Plant – an ethanol producing plant – in Katuba area of Chibombo District to appreciate the potential and challenges of ethanol production, a key activity in the value-chain of blended fuel production.
In August last year, a private sector entity announced plans to start the blending of petrol with ethanol. Sunbird Bioenergy Zambia, based in Luapula Province, disclosed that the company was scheduled to have its first-ever ethanol produced from cassava feedstock, blended with petrol. Sunbird Bioenergy Energy Zambia Agriculture Director Mark Muchinga said the company would have its first ethanol blend, done by Indeni Petroleum Refinery in Ndola.
In the same month, The Energy Regulation Board (ERB) revealed that it had developed and approved the technical specifications for blending fuels in Zambia. ERB Public Relations Manager Namukolo Kasumpa, however, said the process of blending had not commenced due to some logistical aspects required to facilitate for blending of fuels, besides the development of technical specifications. Mrs. Kasumpa said once rolled out, the blended fuel would be available to consumers and the general public just like any other petroleum products currently sold by entities licensed by the ERB.
ERB together with the Zambia Bureau of Standards (ZABS), working with other key stakeholders constituted a Technical Working Committee which has representation from INDENI, TAZAMA, Oil Marketing Companies (OMCs), the Biofuels Association of Zambia (BAZ) and Original Equipment Suppliers and Manufacturers among others. This culminated in the development of Zambian Standards for blending diesel with bio-diesel and bio-ethanol with petrol.
Further, in August 2022, during my courtesy call on Chief Saili, who represented Paramount Chief Mpezeni of the Ngoni people ahead of the commissioning of the Fuel Depot in Chipata, I revealed plans by the New Dawn Government to set up ethanol plants around the country. I announced that the government would this year start constructing ethanol plants in provincial centres for blending fuel, as a measure and strategy to reduce the cost of petroleum in the country.
The plan is that the blended fuel will use ethanol from cassava, although our original wish was to use maize. Using maize, however, is now not an option because it could threaten the national food security.
Apart from cassava farmers, other farmers and businesses can benefit from the blending of fuels with ethanol. For example, Zambia Sugar has the capacity to provide more than 5% of the energy needs of Zambia through ethanol production from the molasses, which is bi-product of its sugar production. With Indeni starting to blend fuel, it can be an off-taker of this ethanol from Zambia Sugar and that can only mean a win-win for both companies and a boost for our economy.
Blending of fuel will reduce the pump-price of fuel, which will reduce the cost of doing business and also facilitate the creation of more jobs for the youths. With blended fuel, we create employment from cassava and maize growers or farmers, to mill operators to transporters and retailers of blended fuel. Further, The blending of ethanol with petrol is expected to reduce the country’s fuel imports by volume hence reduce on the loss of forex by the economy. We are spending a lot of money on imported fuels and blended fuel will help us save the foreign exchange spent on importing fuel through substitutions. Lastly, blended fuel can increase the country’s fuel reserves and cover since part of the fuel, ethanol, won’t need to be imported.
Good morning.
Hon. Eng. Peter Chibwe Kapala
Minister of Energy
- 2023