Why don't the regulatory agencies regulate the base price of RON 95 gasoline?

The price of E5 gasoline is currently nearly 2,000 VND per liter higher than that of RON 95 gasoline.

In the most recent price adjustment period on January 4, the management agency only announced the base price and maximum retail price of E5 RON 92 bio-fuel and oil products, but did not update the price (base, maximum retail price) of RON 95 gasoline - the only remaining mineral gasoline on the market after RON 92 gasoline was officially replaced from January 1, 2018.

Sharing about not updating the base price of RON 95 gasoline in the price management table this time, the representative of the Ministry of Industry and Trade said that this is an unpopular item, previously only managing the retail price of common items such as RON 92 gasoline, oils and later E5 bio-fuel to encourage people to use it. Instead, the main petroleum trading enterprises set their own prices and announce the selling prices in each region, the Ministry of Industry and Trade - Finance plays the role of monitoring the selling prices.

However, according to Mr. Nguyen Tien Thoa - former Director of the Price Management Department (Ministry of Finance), according to the provisions of Decree 83, all types of gasoline must have a base price announced. Therefore, the manager should announce the base price of this type of gasoline for people to monitor.

Also in this operating period, the retail price of E5 gasoline was kept unchanged at VND18,240 per liter after increasing the price stabilization fund at VND857 per liter, an increase of more than VND300 compared to the end of December 2017. Meanwhile, the price of RON 95 increased by VND810 per liter, to VND20,090 - 20,290 per liter depending on Euro III and IV standards. As a result, the price difference between biofuel and RON 95 increased significantly by nearly VND2,000 per liter.

The Ministry of Industry and Trade believes that this gap is enough to encourage people to use more E5 gasoline because it is cheaper than the remaining mineral gasoline on the market. This person also said that preliminary calculations show that about 70% of people have switched from using mineral gasoline to E5 gasoline.

Along with that, the consumption of RON 95 gasoline also recorded an increase of about 20% compared to before and there was a phenomenon of gas stations arranging the number of RON 95 gasoline pumps twice or three times more than bio-fuel, some stores even did not sell E5 gasoline.

According to the leader of the Hanoi Department of Industry and Trade, there are 10 businesses in the area that only sell RON 95 gasoline because the store only has one fuel tank. This partly explains why some stores do not sell E5 gasoline at all but only have RON 95 pumps.

According to Mr. Cao Hoai Duong - General Director of Vietnam Oil Corporation (PVOil), 540 gas stations managed and operated by PV Oil ensure the mass sale of biofuel. With more than 3,000 gas stations belonging to agents and general agents, it is impossible to "force them because the company's only obligation is a long-term product supply contract".

"Biofuel has been used in other countries for a long time, for example, Thailand is now using E85 gasoline with 85% alcohol and 15% mineral gasoline, while Vietnam is still hesitant at E5," he said, adding that with the current price difference of nearly 2,000 VND per liter, consumers will definitely consider using E5 gasoline.

An expert in the petroleum industry said that in the early stages of the transition, people were still afraid of the new type of gasoline on the market, so they "filled in RON 95 gasoline for peace of mind". However, this concern is unfounded because in reality, in 3-4 years of testing in provinces and cities, there have been no cases of complaints about the quality of biofuel affecting vehicle engines. Currently, the Ministry of Industry and Trade is coordinating with the Ministry of Finance to introduce a policy to make the price of E5 gasoline even cheaper, encouraging people to use biofuel.