Vietnam to replace most popular petrol with E5 biofuel

Vietnam to replace most popular petrol with E5 biofuel

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.

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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Link to Original Article:
http://tuoitrenews.vn/business/38277/vietnam-to-replace-most-popular-petrol-
with-e5-biofuel

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com