High Fuel Price: Kenya to Blend Petrol with Ethanol

The blending of petrol with ethanol will be re-introduced  in the Kenyan market next March in a move that is expected to cushion motorists against oil products’ price volatility and offer local alcohol distillers a bigger market.
A notice published in the Kenya Gazette dated November 24 indicates that all petrol sold in the Kenyan market will be mixed with alcohol to make gasohol.
With effect from March 1, all motor gasoline loaded from the petroleum storage and loading depots for sale in Kenya shall be blended with power alcohol to make gasohol,” said the gazette notice signed by Energy Regulatory Commission (ERC) director-general Kaburu Mwirichia.
Coming at a time when petrol prices have risen 20 per cent since August and are expected to continue rising in coming months, revelation by the energy regulator ERC that petrol will be blended with locally made ethanol to slow down the prices rally is set to excite consumers.
The blended fuel will increase demand for produce from local alcohol manufacturers who have been struggling to get a market and also cut expenditure on importation of fossil fuels, saving on hard currency at a time when foreign currency inflows have slowed down.
The increased demand for ethanol should enhance the performance of Kenya’s under performing sugar sector that has been racing to diversify away from sugar production with power generation and alcohol manufacture their focus ahead of 2012 when protection from cheaper sugar imports is scheduled to end.
Petrol; which is either imported or refined at Kenya Petroleum Refinery Limited (KPRL) – will be blended at Kenya Pipeline Company depots in Kisumu and Eldoret, close to the country’s alcohol producing plants and western Kenya’s sugar belt.
This means that the blended fuel will first be made available in western Kenya – which are served by the twin depots – from the March kick off date, but a national roll-out will follow in the second half of the year once the KPC depots in Nairobi and Nakuru are roped in.
“The rest of the country will sell the normal fuel but a national roll out is still on the cards,” said Mwirichia, adding that the national roll-out was staggered due to concerns that power alcohol producers are not in a position to match demand.
The country produces about 360,000 litres of ethanol per year, compared to annual petrol consumption of 3.2 billion litres.