A Zimbabwean citizen Tabani Mpofu has taken the Zimbabwe Energy Regulatory Authority (Zera), Energy and Power Development minister Dzikamai Mavhaire and Green Fuels to court over the issue.
Mpofu, through his lawyer Tendai Biti, last week launched a constitutional challenge of Green Fuel’s monopoly and blending ratios.
He argues the monopoly and blending ratios do not guarantee fair competition and are not in the interest of motorists. This follows the introduction by government of mandatory blending ratios of E15 on November 30.
The blending started with 5% ethanol and 95% unleaded petrol on August 15, following the issuance of an ethanol production (mandatory blending) licence to Green Fuel on August 5. The blending increased to 10% and then 15%.
Government is now pushing for E20 by March 2014.
In a court application to the Constitutional Court, Mpofu said the net effect of compulsory blending was that unleaded fuel is now banned in Zimbabwe.
He said mandatory blending was a violation of the people’s fundamental right as provided in the Bill of Rights contained in Chapter 4, Article 47 of the Constitution.
Freedom of choice and of fairness, Mpofu said, were under such rights. He said the regulations were not consistent with the new Constitution.
“The preamble of the Constitution speaks of the right of the resolution to build a just and prosperous nation founded on the values of freedom and fairness among others,” Mpofu said.
He said the actions by the three respondents showed contempt of Zimbabweans as the regulations to migrate from E5 up to E20 have been done without any scientific research by an independent authority to study the effects of ethanol on vehicles.
“There is no explanation for this accelerated movement and in the absence of such; the inescapable conclusion is that the whole motive is that of profit and greed,” he said.
That was despite communication from car manufacturers, particularly Nissan Zimbabwe (1996) pointing out the challenges of E15 and E20.
“There is also further prejudice in the pricing of this anhydrous ethanol blended fuel. Whereas the international process of the anhydrous ethanol is generally $0,60, the third respondent is selling its fuel for $0,95 per litre.”
He said Green Fuels was abusing its monopoly by overcharging whereas licenced operators could procure ethanol at a lower cost from other sources.
“The issue of pricing has a further Constitutional dimension which on its own justifies the setting aside of the regulations,” said Mpofu.
He queried why all operators were being forced to procure ethanol from one source.
“This is a monolithic right that is completely unconstitutional. Triangle in the Lowveld is producing anhydrous ethanol which it is being allowed to export for a price of around $0,60. Surely, the licensed traders and blenders ought to be allowed to purchase from such a company or others,” Mpofu argued.
He said Zera had no authority to make any regulations governing ethanol because it does not fall under petroleum products.
A monopoly, he said, was also against the mandate of Zera as, according to the law, should facilitate competition between players in the petroleum industry.
“Further, the first respondent (Zera) should protect the interest of consumers and purchasers and other users. The regulations are clearly not doing this,” said Mpofu.“The first and second respondents (Zera and Mavhaire) overreached their powers. They breached Article 134 (a) by in fact making new law, when Parliament cannot delegate its law-making powers.”
He said by August 2013, no joint venture had been made between Green Fuels and government, making the monopoly and blending regulations a nullity.
According to the court papers E15 was introduced after Mavhire’s tour of Green Fuels and Mpofu said “it is completely unconstitutional for him to take his opinions as policy, despite that Zera expressed reservations in the proposed ratios.
“Not all vehicles can take ethanol and going beyond E15 was prejudicing many Zimbabweans whose vehicles were produced before 2001 which can only take E5, according to data released by the Australian Federal Chamber of Automotive Industries.”
He said ethanol was 12 to 25% less efficient than unleaded fuel and that it burns faster than unleaded fuel.
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