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E5 biofuel widely sold in central Vietnam, as planned, but not in south

E5 biofuel widely sold in central Vietnam, as planned, but not in south

Sunday, June 21, 2015, 09:05 GMT+7

E5 biofuel has become popular in the central region, while it is still hard to find a filling station selling it in Ho Chi Minh City, more than six months into a campaign launched by the government to boost the use of the biofuel in Vietnam.

Previously, seven localities, including Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, Can Tho, Ba Ria-Vung Tau Province and Quang Ngai Province were required to sell biofuel at all local gas stations starting on December 1, 2014, under the government decision to stimulate consumption of the fuel, which is believed to be better for the environment.

The biofuel accounts for over 80 percent of the market share in the central province of Quang Ngai, where the Dung Quat oil refinery, the sole such facility in Vietnam, is churning out the petroleum product, according to Pham Nhu So, vice chairman of the local People’s Committee.

About 100 percent of fuel dealers and stations in the province are distributing E5, he added.

Hoa, an employee at a filling station located in the provincial capital city of Quang Ngai which is the biggest gasoline retailer there, said the majority of customers currently choose to buy E5 instead of RON 95 gasoline, as the former is VND300 per liter cheaper than the latter.

RON 92, the conventional gasoline that E5 replaces, has been removed from the fuel retail chain in the province.

According to the Department of Industry and Trade in the central province of Quang Nam, though the province is not included in the list of localities to mandatorily sell E5, so far 165 petrol stations there have sold E5 and RON 95, with total sales of the biofuel in the first five months of the year reaching 15 million liters.

Meanwhile, in the central city of Da Nang, most stations also offer E5, bringing the total volume of the biofuel sold from November 2014, when the city began executing the campaign to distribute E5 to substitute RON 92, to the end of April to 19.2 million liters, said a local official.

The figure accounted for 50 percent of all gasoline consumption in the province during the period, according to Lu Bang, deputy director of the Da Nang Department of Industry and Trade.

Out of sight, out of mind

However, finding a filling station selling E5 in Ho Chi Minh City, the biggest city and the economic hub of Vietnam, is still not as easy as in the central region.

A filling station under state-run oil conglomerate PV Oil near the Ban Co area in District 3 said it sells 2,000-3,000 liters, equivalent to the amount of RON 95 gasoline sold there, daily.

At petrol station No. 1 on the corner of Ly Thai To and Le Hong Phong Streets in District 10, the only customers buying the biofuel are taxi drivers.

"E5 causes no problem for us at all, and we choose it as it is cheaper than RON 95,” Thai Van Linh, a taxi driver, said.

The problem is refueling with it, as it is not easy to find a place that sells E5, Linh said, adding that when their fuel tank is running low, taxi drivers have no choice but to drive toward the gas stations which sell the biofuel. According to the Ho Chi Minh City Department of Industry and Trade, 10 out of 19 fuel wholesalers trade in E5, with 58 stations across 24 districts.

But according to a survey by Tuoi Tre (Youth) newspaper, it is very hard to spot a station selling E5, even those owned by Petrolimex, the biggest chain, in prime locations downtown, such as petrol station No.1 in the Da Kao area in District 1, station No. 26 on Nguyen Dinh Chieu Street in District 3, and station No. 7 near the Khanh Hoi Bridge in District 4.

Tuoi Tre reporters could not find any either when traveling along major streets like Quang Trung and Hoang Van Thu in Go Vap and Tan Binh Districts.

Tran Ngoc Nam, deputy general director of Petrolimex, the biggest fuel wholesaler in Vietnam with over 48 percent of the local market share, said the chain is currently selling E5 in eight provinces and cities with sales in the first five months averaging 6,700m³ per month, only about two percent of the total volume of gasoline sold by Petrolimex.

Meanwhile, according to Dang Van Hoai, deputy head of the retail department of Petrolimex Saigon, said around 15 million liters of E5 has been sold through six months, accounting for about 4.6 percent of its total sales.

Meanwhile, Bui Xuan Vu, director of trading company Saigon Fuel, in which the E5 sales volume makes up approximately two percent of the total fuel sold by the firm, said the profit of selling the E5 is equivalent to that of other types of fuel.

However, there is more wastage of the fuel due to the process of blending conventional gasoline with ethanol to make E5 before retailing.

According to an expert on biofuels, the profit issue is something that could potentially hinder many gas stations from selling E5.

This may include a possible scenario where gas stations have already mixed conventional gasoline with other substances before, so they cannot additionally blend ethanol to make E5, he told Tuoi Tre.

According to information from the Department of Science and Technology under the Ministry of Industry and Trade, E5 gasoline consumption in the first four months of 2015 topped 88,761m³, or about 22,000m³ per month, which occupied less than 1.7 percent of total petrol consumption nationwide.

Vietnam consumes approximately 16 million m³ of fuel annually, equivalent to 1.3 million m³ per month.

Data from the Ministry of Industry and Trade show that currently there are over 500 stations  selling E5, including those in Quang Ngai, Quang Nam and Da Nang which have completely replaced ordinary RON 92 gasoline with the biofuel.

Many benefits of using the E5Nguyen Hoai Giang, chairman of Binh Son Oil Refinery JSC (BSR), which manages the Dung Quat oil refinery, told Tuoi Tre that the E5 production process at the facility strictly follows international technical requirements recognized by related Vietnamese and international agencies. In particular, according to Giang, before selling E5 to the market, BSR vehicles used half a million liters of the fuel churned out by the plant to safely run for nearly 2.48 million km without suffering any incidents. "The use of E5 not only contributes to environmental protection but also to the consumption of cassava for local farmers, helping step up the economic development of the country,’ he added.

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