E5 gasoline price drops sharply?

To encourage consumers to use E5 bio-fuel, the selling price must be reduced to about 1,000 - 2,000 VND/liter lower than the selling price of RON 92 gasoline.

That was the opinion of delegates at the workshop "Using biofuels - Sustainable development solutions" organized by the Ministry of Industry and Trade on October 17.

No worries about shortage of supply

According to the Ministry of Industry and Trade, when RON 92 gasoline consumption stops, about 5.4 million cubic meters of E5 gasoline will be needed to supply the market, equivalent to 250,000 - 270,000 tons of E100 raw materials/year for blending. To achieve this goal, there are currently 4 factories nationwide, of which 2 factories in Dong Nai and Quang Nam of Tung Lam Company are operating with a total capacity of 200,000 m3 of ethanol/year (200 million liters/year), enough to blend 3.9 million cubic meters of E5 bio-fuel/year.

The two remaining factories, Dung Quat and Binh Phuoc, are actively preparing to restart at the end of 2017, supplying the market with about 200,000m3 of E5 bio-fuel.

The difference between the retail price of E5 gasoline and RON 92 mineral gasoline is still low; only about 230 VND/liter, so it is not enough to attract consumers to switch to E5 gasoline.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said that with the current capacity of domestic fuel factories, it is completely possible to meet the demand for E5 gasoline when replacing RON 92 mineral gasoline from January 1, 2018. At the same time, petroleum businesses are allowed to import E100 biofuel.

Regarding infrastructure, there are currently 5 petroleum trading hubs with E5 gasoline mixing stations, all located at large enterprises such as: Vietnam National Petroleum Group (Petrolimex), Vietnam Oil Corporation (PV OIL), Ho Chi Minh City Petroleum Company Limited, Military Petroleum Corporation, Nam Song Hau Petroleum Investment and Trading Joint Stock Company, with the capacity to mix and supply the market with over 3 million cubic meters of bio-fuel.

New consumption reached 9%

In fact, E5 gasoline is being sold alongside RON 92 and RON 95 mineral gasoline. However, according to the assessment of the Vietnam Petroleum Association (VINPA), many consumers are not really interested in this product, the consumption rate of E5 gasoline is only 9% of the total consumption of mineral gasoline. The reason is that the difference between the retail price of E5 gasoline and RON 92 mineral gasoline is still low, only about 230 VND/liter, so it is not enough to attract consumers to switch to E5 gasoline.

General Director of Nam Song Hau Petroleum Investment and Trading Joint Stock Company Mai Van Huy stated: Currently, enterprises are not interested in trading E5 gasoline because the sales volume is very low and the discount rate is not high, from 1,000 - 1,600 VND/liter, which cannot cover operating costs. In particular, the cost of purchasing, processing, and the loss rate during the production and preservation of ethanol is high, leading to the high price of E5 bio-gasoline.

Regarding the quality of this product, a representative of the Vietnam Standards and Consumers Association (Vinastas) requested that the authorities clarify the safety of using bio-fuel mixed with mineral gasoline.

"Consumers are concerned when advised not to use E5 biofuel for old cars and cars with non-genuine spare parts. To make E5 gasoline more widely used, it is necessary to increase propaganda about E5 gasoline so that consumers can change their habits. In addition, it is necessary to ensure product quality, have instructions and give transparent recommendations to consumers when using E5 gasoline" - Vinastas Vice President Nguyen Manh Hung commented.

To create attractive factors and stimulate consumption of E5 gasoline, experts say that the Government needs to direct ministries and branches to research policies and support mechanisms for tax reduction and special consumption tax exemption... Thereby, reducing the selling price of E5 bio-fuel to about 1,000 - 2,000 VND/liter lower than the selling price of A92 mineral gasoline. At the same time, support part of the costs of blending, producing, circulating, and preserving E5 gasoline to reduce pressure and difficulties for businesses.

According to Economics & Urban