Request for clarification on information about the high cost of E5 gasoline

The Government Office has just issued a document to review and study the press's reflection on the policy of producing and trading E5 A92 bio-fuel. The cost of ethanol production is currently quite high. If there are no measures, consumers will be disadvantaged when forced to use E5 gasoline.

Specifically, key petroleum enterprises said that in order to implement the roadmap to replace RON 92 gasoline with E5 gasoline, enterprises encountered many difficulties during the implementation process, not to mention having to spend a large amount of money when converting to E5 business.

It is estimated that the investment cost for a distribution station varies depending on the scale, but on average, a station costs about 10 billion VND. In addition, although there are 29 key enterprises importing and trading gasoline, the investment burden to convert and implement the blending of E5 bio-fuel is mainly placed on the shoulders of a few enterprises, including PV Oil, Petrolimex, Saigon Petro, Thanh Le, etc.

According to the biofuel development project approved by the Prime Minister, from January 1, 2018, RON 92 gasoline will be completely replaced by E5 gasoline.

Representatives of key businesses affirmed that the current selling price of E5 gasoline is only 100 VND/liter cheaper than RON 92 gasoline, so consumption is difficult, while the investment cost for the storage system is quite expensive, so most businesses are not interested in E5 gasoline.

Data from the Ho Chi Minh City Department of Industry and Trade also shows that out of 533 gas stations in the city, 240 stores sell E5 biofuel. However, the average consumption is only 8,053 m3 per month, accounting for 6.2% of the city's gasoline consumption. Some businesses have sent documents requesting the management agency to temporarily suspend the sale of E5 gasoline.

Chairman of the Vietnam Petroleum Association Phan The Rue said that the biofuel factory of Tung Lam Company Limited is still producing regularly but is facing difficulties due to unsold products. If sold at import prices, it will lose "to death".

Not to mention when biofuel factories come into operation, farmers will increase the selling price of cassava. If the factories are put into operation again, they will have to have the cost price equal to the import price to sell their products.

According to the biofuel development project approved by the Prime Minister, starting from January 1, 2018, RON 92 gasoline will be completely replaced by E5 gasoline - a type of gasoline mixed at a ratio of 95% regular mineral gasoline (RON 92 gasoline) with 5% biofuel, which is ethanol (E100 alcohol).

VnEconomy