Ethanol pricing awaits Finance Ministry

Ethanol Company Limited (Ethco) says the operationalisation of the Ethanol Vehicles Driven Project (EDVP)—whereby motorists can choose whether to use ethanol as a standalone fuel or a blend of ethanol and petrol—is awaiting a pricing mechanism of the fuel from the Ministry of Finance, Economic Planning and Development.

EDVP, which was pioneered by PressCane—a subsidiary of Press Corporation Limited (PCL)—kick-started in July with the installation of conversion kits in about 50 vehicles.

In an interview in Blantyre, Ethco general manager Lusubilo Chakaniza said despite rolling out the project, filling stations cannot sell the fuel as government has not yet set the selling price.

She said Ethco submitted a proposal to the ministry, asking for the pricing model for ethanol in which it considered benefits of both the producer and the consumer.

“The proposal was submitted in April this year after which they asked for more information and we re-submitted it in May. We are still waiting for the ministry to address and approve the proposal so that we can set the price for ethanol,” she said.

She said while waiting for the approval of the pricing mechanism, the company is currently tendering for the conversion kits and has scaled up efforts to boost its capacity by engaging farmers to grow and sell sugarcane to the ethanol distillery.

Puma Energy managing director Davies Langesi said all is set for their company to start selling ethanol fuel.

“We are ready to start selling the fuel. The moment all policy issues are sorted out, we will be ready to put the product on the market,” he said.

He described ethanol as a right alternative for petroleum fuel.

“Ethanol, as compared to petrol, is seen to have a net positive cost-benefit impact on the economy. The use of this fuel can positively contribute to fuel price stability, reduce vehicle running costs, reduce foreign exchange requirements and help address challenges faced by the country due to reliance on imported fuels,” he said.

Asked for comment on the matter, Ministry of Finance spokesperson Nations Msowoya confirmed that they received the proposal and they are looking into the matter.

He added that Ethco, jointly with the National Commission of Science and Technology, who are the champions of the project, are encouraged to regularly check the progress of the proposal.

Malawi consumes in excess of 100 million litres of fuel per year. Currently the country largely depends on imports to meet local fuel demand.

EVDP was initiated in 2004 after a cabinet directive that Malawi should explore other sources of fuel for vehicles with the overall objective of contributing to economic development by promoting the use of ethanol as an alternative energy. n