E5 gasoline - Stimulating demand will be difficult without a pricing mechanism.

After three months of implementation, it can be seen that the market and consumers have received E5 bioethanol fuel with a rather reserved and cautious attitude.

Despite the determination of local authorities, state management agencies at all levels, and petroleum distribution and distribution companies to implement the roadmap, coupled with support from the mass media regarding the superior features and significance of using E5 bioethanol in social life, the consumption of this product has not shown any signs of improvement.

To boost consumption and increase the market share of E5 gasoline compared to traditional mineral gasoline, the public is wondering: What is the appropriate pricing mechanism for this type of biofuel?

The launch of E5 bioethanol fuel into the market is still facing difficulties. (Illustrative image)

In fact, in the most recent adjustments to gasoline prices (since the Government's Decree 83/2014/ND-CP on gasoline business officially came into effect), E5 bioethanol gasoline has been priced at the same level as RON92 mineral gasoline. Consumers are also increasingly benefiting as world and domestic gasoline prices tend to continuously decrease.

However, changing people's gasoline consumption habits to E5 bioethanol fuel is not something that can be done overnight. More importantly, it will be difficult to persuade consumers to change their choice when the basis for calculating the cost of both input and output fuel has not yet been established – something that needs to be publicly and transparently disclosed as has long been required. To ensure their rights are protected, consumers need to know how the product they use is blended, what its quality and standards are, what is the basis for calculating the cost, and whether it is more expensive or cheaper compared to world prices...

Pricing issues have been a concern since the pilot implementation of E5 gasoline. Mr. Nguyen Sinh Khang, Deputy General Director of the Vietnam Oil and Gas Group (PVN), stated that the government has not yet implemented any financial support policies for the distribution and consumption of E5 gasoline. Many businesses are also hesitant to invest in biofuel retail outlets due to the high cost of converting existing stations, not to mention the business costs of selling E5 gasoline based on raw material prices and transportation, resulting in a price difference of several hundred dong per liter compared to traditional gasoline.

According to Deputy Minister of Industry and Trade Cao Quoc Hung, E5 gasoline and regular gasoline currently have the same price due to market principles, but the Government will consider providing tax and fee support for bio-gasoline to encourage businesses and consumers to use this type of fuel.

Therefore, it can be explained that until businesses and the government agree on a suitable pricing mechanism for E5 bioethanol, it will remain difficult to stimulate demand for biofuels.

To solve this problem, petroleum businesses are proposing that the State soon implement specific and long-term policies to invest in and encourage biofuels, such as exempting import taxes on equipment and materials for storing, transporting, blending, or distributing biofuels that are not yet produced domestically. They also suggest considering exempting environmental taxes and fees on the base gasoline used for blending E5 gasoline; and reducing the special consumption tax on E5 gasoline put into circulation...

In addition to proposing support policies, Chairman of the Board of Members of PVN Group Nguyen Xuan Son also emphasized that, in order for the policy of developing E5 biofuel to be implemented effectively, the State should consider deploying a national-level strategy for promoting biofuels to raise public awareness and call for the participation of the whole society in protecting the environment.

In accordance with Decision 53/2012/QD-TTg of the Prime Minister, which outlines the roadmap for applying the blending ratio of biofuels with traditional fuels, from December 1, 2014, E5 bioethanol gasoline has been widely sold in seven provinces and cities nationwide: Hanoi, Hai Phong, Quang Ngai, Da Nang, Ho Chi Minh City, Can Tho, and Ba Ria - Vung Tau. This product will also be officially used for road motor vehicles nationwide from December 1, 2015.

Deputy Minister of Industry and Trade Cao Quoc Hung once emphasized that increasing the production and consumption of E5 gasoline is a major policy aimed at diversifying national energy sources, addressing environmental issues and carbon emissions in Vietnam, and contributing to a greener and cleaner Vietnam in the future.

According to expert analysis, Mr. Bui Ngoc Bao, Chairman of the Board of Members of Vietnam Petroleum Corporation (Petrolimex), believes that users will save more money when switching to E5 or E10 bioethanol fuel compared to traditional gasoline. Machinery will also operate better and last longer. Bioethanol fuel, containing 5% ethanol, increases the octane rating (the anti-knock rating of the engine), resulting in fewer toxic emissions. The combustion products are CO2 and H2O, reducing corrosion in machinery. This is very beneficial for vehicle engines. Using E5 fuel also reduces fuel consumption, so users will benefit economically.

According to Baotintuc.vn