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Blending rule to cut pump fuel prices

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Agriculture Minister William Ruto (right) on Wednesday explained that the move would reduce the country’s dependence on petroleum products and cover motorists against unpredictable prices of fuel. Photo/FILE

By WALTER MENYA Posted Wednesday, January 13 2010 at 18:56

Kenya’s import bill for fossil fuel is set to come down drastically after the government made blending of petrol with ethanol produced by local sugar firms mandatory.

Regulations for the blending to produce gasohol were gazetted on November 27 last year and will take effect on March 1, 2010, said agriculture minister William Ruto.

“All motor gasoline loaded from the petroleum storage and loading depots for sale in Kenya shall be blended with power alcohol to make gasohol,” reads the gazette notice 12900 of November 24, 2009 signed by Mr Kaburu Mwirichia, the director general of the Energy Regulatory Commission.

Mr Ruto on Wednesday explained that the move would reduce the country’s dependence on petroleum products and cover motorists against unpredictable prices of fuel.

More importantly, the minister said, it would provide a ready market for the ethanol that will be produced by sugar factories and take the country closer to attaining the goal of preserving the environment through the use of green energy.

The move will also enhance competitiveness of the sugar sector. “Suggestions have been made to make it mandatory that fuel in the country must be blended with ethanol produced by our sugar factories,” said Mr Ruto. Kenya needs about 40 million litres of bio-ethanol annually to blend with petrol at the recommended ratio of (petrol to ethanol) 1:9, otherwise known as the E-10 mandate.

The draft Bio-Ethanol Strategy paper argues that bio-ethanol presents one of the best options for the country in view of dwindling global oil reserves and unpredictable fuel prices.

It notes that the total import bill of petrol products increased by 7.1 per cent from Sh113.7 billion in 2006 to Sh121.8 billion in 2007, while global oil prices passed the $100 a barrel mark. Pump prices have risen by 20 per cent since August 2009 with industry observers predicting a worsening situation.

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