On 6 June, 2017, the Prime Minister issued Notice No.255 directing that the mineral oil RON 92 will be replaced entirely by E5 biofuel in the whole country on January 1, 2018. Talking about the preparation of ethanol supply and infrastructure of the focal enterprises, petroleum agents, the Deputy Minister said: "Recently, the Ministry of Industry and Trade has actively worked with localities, petroleum establishments, biofuel producers to promote communication to people and customers to prepare the technical infrastructure for conversion and replacement as well as the policy formulation to encourage the production of biofuel".
On the supply of biofuel, Vietnam currently has four production plants, including two factories in Dong Nai and Quang Nam of Tung Lam Company which are operating with a total capacity of 200,000 m3 of biofuel per year. The remaining two factories in Dung Quat (Quang Ngai province) and Binh Phuoc are halted due to lack of market for the products, expected to restart by the end of 2017 to supply the market about 200,000 m3 of biofuel. In case the total consumption of RON 92 gasoline replaced by E5 biofuel from early 2018, the E5 biofuel volume should be about 5.4 million m3. Along with that, the supply of raw material E100 for mixing E5 biofuel is about 250,000 - 270,000 tons per year.
In terms of infrastructure, there are now five petrol establishments with E5 mixing stations focusing on large enterprises such as: Petrolimex; Vietnam Oil Corporation (PV OIL - Vietnam Oil and Gas Group); Saigon Petro Co., Ltd; MTV Company - Mipec; Song Hau Petroleum Investment Trading JSC is capable of mixing and supplying the market with over 3 million m3 of biofuel.
It is expected that these companies will invest more infrastructure and it is estimated that by the end of the year, the mixing stations’ capacity will reach over 6 million m3 of biofuel/year to meet the demand from the beginning of 2018.
E5 biofuel price is cheaper around 150-200 VND/liter compared with gasoline RON 92 and 700 - 800 VND/liter with gasoline RON 95. Such price difference is not attractive to consumers. The Ministry of Industry and Trade will work with the Ministry of Finance to set policies on taxes, fees, etc. for biofuel in order to create reasonable price difference, enough to encourage consumers to use gasoline E5.
Specifically, the two ministries will unite import tax on raw materials E100; environmental tax on biofuel E5; excise taxes and other policies to ensure the price difference between E5 and RON 95 between 1.500 and 2.000 VND/liter. At the same time, coordinate with the Ministry of Science and Technology to unite the technical standards for biofuel E5 and work together with the Ministry of Agriculture and Rural Development to plan raw material areas and plan high-productivity cassava to serve the production of E5 biofuel.
Previously, E5 biofuel was not attractive to consumers due to many reasons, including the negligible difference between E5 biofuel and RON 92, insufficient communication and inadequate preparation of supply and mixing station.
This time, the Ministry of Industry and Trade has prepared well. Specifically, the Ministry has worked with petroleum establishments such as Petrolimex, PV OIL and localities to promote communication and propaganda, facilitate the petroleum business, expand infrastructure development, etc.
Concerning the quality issue, over 3 years sold in the market, especially in localities have deployed 100% of E5biofuel as Da Nang, Quang Nam, Can Tho, shows that biofuel E5 fully meet the technical standards as well as ensure the quality of the means of the user. Therefore, we can be completely reassured about the quality of E5 biofuel when it comes to the market.
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