Ethanol fuel use; good for Malawi economy–Expert

Using ethanol fuel as an alternative for petrol is good for the Malawi economy, but can be achieved with increased production of molasses to be used as ethanol production feedstock, an expert in the oil industry has said.

Malawi Energy Regulatory Authority (Mera)  acting chief executive officer Elias Hausi, responding to an e-mailed questionnaire, said using ethanol is likely to reduce the amount of fuels that the country imports; hence, saving on foreign exchange and contributing to the economic stability of the country.

“As an alternative to unleaded petrol, ethanol is procured in Malawi kwacha and hence a direct saving on forex. Above all, there is more local activity in ethanol upstream activities as such it contributes to employment creation relative to unleaded petrol which is imported in a form ready for use,” he said.

According to Hausi, Malawi imports around nine million litres of unleaded petrol per month totalling to 108 million per annum which is required to be blended at the ratio of 80 percent petrol and 20 percent ethanol.

However, currently the combined declared volumes of the two major ethanol producers is less than 27 million which has been attributed to seasonality of cane sugar.

“We are aware that the country’s two ethanol producers source their molasses from sugar producers and that there are not adequate. But on a lighter note, we are pleased with plans by ethanol producing companies to start producing own sugar cane for use in the production of sugar juice for purposes of ethanol production,” he said.

Optimistic about a possible demand for the product, Hausi said there are plans to roll out flexi vehicles in Malawi before end of the year.

“Tests on few flexi vehicles have been successful and we are expecting ethanol companies to avail ethanol at filling stations to enable people who would want to use 100 percent ethanol or any combination with petrol, to access the fuel.

With flexi vehicle on the market, there will be need to increase ethanol availability even more. The National Commission of Sciences has been championing the studies,” he said

Meanwhile, ethanol pricing has currently been pegged to the wholesale price of petrol as a percentage, but the regulator will soon be finalising the pricing framework which will see the ethanol pump price being determined using the cost of production and distribution, rather than depending on price of petrol.

Concurring with Hausi, Department of Energy Affairs in the Ministry of Energy and Mining deputy director Joseph Kalowekamo said the concept has a benefit attached to it.

He said the project is sustainable, explains that ethanol producing companies and government are committed to ensuring that all goes according to plan

“It is pleasing that companies are willing to work on increasing their capacity. Above that, there also exists option for importation of molasses to supplement the locally produced,” he said.

Commenting on the development, Consumers Association of Malawi (Cama) executive director John Kapito says the concept which will give motorists choice to choose either ethanol or petrol in service stations will have a significant impact on fuel prices and benefit consumers.

Kapito said this in an interview highlighting that the development as it is likely to bring competition on the market thereby increasing the possibility of fuel reduction.

“Having a home-grown product will significantly benefit Malawi economically. Government spends a lot of money to import fuel, but having this project means government will save the money for other meaningful duties and that an average Malawian will afford to use a car,’’ he said.

He said petroleum products, the drivers of economy, need to be taken seriously; hence, advised authorities at the helm of the project to explore other opportunities and exploit it to the fullest.

A recent report released by Global Petrol Prices indicate that Malawi’s  prices for petrol and diesel are one of the highest in the world, a situation that has been attributed to the high transportation costs and taxes, according to energy experts.