Malawi government delays ethanol fuel rollout

Post was last updated: November 27, 2015

Six months after stakeholders and top ethanol producers made a proposal to price ethanol at a market price 20 percent lower than the price of petrol, government is yet to give its final decision on the matter.

The producers, including Presscane Limited, Ethanol Company of Malawi and subsidiaries of Press Corporation Limited (PCL) in May this year proposed 20 percent deference between petrol and ethanol prices on the market.

Speaking in an interview, PCL General Manager responsible for operations, Alfred Guta, said the companies are awaiting government’s decision on the proposal before they can start setting up ethanol pumps in filling stations across the country.

“We are able to launch greater utilisation of ethanol in the country. The basic problem is that for us to deliver it to the consumer, we have to give the consumer a discount of at least 20 percent compared to the petrol price,” he said.

Guta said the PCL subsidiaries had already done market studies that determined viability of the pricing policy.

He said once the government gives a go ahead, the companies plan to carry out pilot studies in the three main cities of Blantyre, Lilongwe and Mzuzu before rolling out the product country wide.

“We have done everything we could to discuss the matter with the relevant stakeholders. We do not want to be seen to be lobbying in a manner that is counterproductive. We believe that the government will, in its right time, respond to this. The sooner the better not just for us, but for the entire economy,” said Guta.

Malawi is currently able to produce a maximum of 36 million litres of ethanol per annum, some of which is used in the production of other commodities on the market.

Of this, only 20 million litres is used for blending with petrol.

The Malawi Government is promoting imported ethanol-fuelled cars to wean the country off its fossil fuel dependency and better harness the country’s ethanol industry.

This is part of Malawi’s ongoing drive to find alternative and cheap sources of fuel to replace imported fossil fuels.

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