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Vietnam to replace most popular petrol with E5 biofuel

Wednesday, November 30, 2016, 13:09 GMT+7
Vietnam to replace most popular petrol with E5 biofuel
A man pumps gasoline at a filling station in Ho Chi Minh City.

Vietnam’s Ministry of Industry and Trade will force consumers to switch from the popular A92 gasoline to the ethanol-mixed biofuel E5, but has yet to decide on an official timeline for the plan, it announced on Tuesday.

In Vietnam, A92, or petrol with an octane rating of 92 percent, is the most popular gasoline, but over the last few years the government has been trying to boost consumption of E5, which is A92 petrol containing 5 percent ethanol.

On Tuesday morning, the trade ministry announced on its online portal that it may “completely replace all A92 with E5 by mid-2017.” However, the announcement was quickly corrected, with the timeline detail omitted.

A department-level official from the ministry later confirmed the A92-to-E5 transition plan to Tuoi Tre (Youth) newspaper, but said it could not be done by the middle of next year.

“The transition will be done at a suitable point of time,” he said.

At the regular government meeting in the afternoon, Deputy Minister of Industry and Trade Hoang Quoc Vuong also said there was no final conclusion yet on when Vietnam will stop selling A92 gasoline to switch to E5 biofuel.

“What can be confirmed now is that the mid-2017 timeline is impossible because large-scale production of E5 petrol has yet to begin anywhere,” Vuong said.

The plan to make E5 a compulsory fuel is seen as an attempt by the Vietnamese government to restart operations of E5 producing plants across the country.

Vietnam now has four such facilities, but only one of them is operational, producing some 150,000 metric tons of the biofuel a year.

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Bui Ngoc Bao, chairman of Petrolimex, Vietnam’s largest fuel wholesaler, said he was surprised to learn of the plan to replace A92 gasoline with E5 biofuel.

Bao said that if the plan is implemented, Petrolimex is still capable of ensuring supply of the biofuel. However, the government should consider reactivating its inactive biofuel plants in order to meet demand, instead of solely relying on imports.

Nguyen Van Tiu, general director of the Tu Luc I fuel wholesaler, said E5 biofuel is selling much slower than A92 as local consumers have little confidence in the product.

Tiu said if it was much cheaper to use the biofuel, consumers may change habit. At present, E5 is only VND150 a liter cheaper than A92.

“If the price difference was VND1,000 or VND2,000 a liter, consumers may change their ideas,” Tiu said.

From an expert’s perspective, Ngo Tri Long, a price management pundit, said the government should encourage, instead of mandate, the use of E5 biofuel.

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