eBusiness Weekly
Business Writer
Government has moved to beef up national fuel stocks with a US$40 million facility set aside for the past six months to maintain levels covering 30 days, according to Energy and Power Development Minister, Zhemu Soda.
Zhemu revealed this in Cabinet on Tuesday while presenting the country’s strategies to standardise fuel procurement system.
“Cabinet wishes to inform the nation that the instability in Eastern Europe has increased the uncertainty in fuel supply. Government has, therefore, increased efforts to improve the Strategic Fuel Reserve, with US$40 million worth of fuel having been procured in the last six months.
“The intention is to maintain at least a 30-day stock cover, which, at the current consumption levels, translates to 150 million litres. This fuel would be released onto the market to plug supply gaps or to stabilise prices,” reads a Cabinet report.
Zhemu told Cabinet that the nation was informed that in the immediate term, many strategies were going to be adopted to stabilise the fuel supply situation.
Reads the report in part: Cabinet has adopted the following strategies: Resumption of petrol blending at E10 from 25 April 2022, which has reduced the pump price of petrol by US$0.04 per litre. The blending will go up to E20 by end of May 2022, which will lead to a higher reduction in the price of petrol by US$0.07 per litre.
Government intends to set up a Fuel Price Stabilisation Fund, to cushion consumers from sharp increases in fuel prices. Discussions are on-going on the modalities and timing of the fund. Government will come up with measures to stabilise and ensure a consistent supply of fuel.”
The ethanol supply situation in the country becomes erratic during the rainy season as heavy cane harvesting equipment will be unable to navigate the muddy sugar cane fields mainly run by Green Fuels, the major supplier of ethanol for blending.
In some cases, this results in lower blending ratios and at times 100 percent unleaded petrol will be sold on the market as the ethanol levels deplete.
