Vietnam: Domestic materials for E5 fuel in short supply

Vietnam: Domestic materials for E5 fuel in short supply

The Ministry of Industry and Trade (MOIT) estimates that from January 1,
2018, when Vietnam shifts from using RON 92 to RON 95 and E5, total E5
consumption volume would be around 5.357 million cubic meters, or 70 percent
of total fuel demand.

In 2016, Vietnam consumed 7.4 million cubic meters of petrol, including
590,000 cubic meters of E5 biofuel, which accounted for 8 percent of total
consumption. The remaining was mineral petrol, accounting for 92 percent. Of
this, 30 percent of the consumed fuel was RON 95 and 70 percent RON 92.

Also according to MOIT, ethanol, the material for mixing E5, comes mostly
from two plants of Tung Lam Company Ltd with total capacity of 200,000 cubic
meters per annum (200 million liters). This is enough to create 3.9 million
cubic meters, or 3.0 million tons of E5 a year.
In 2016, Tung Lam sold 2,000 cubic meters in the market.

Besides the two plants of Tung Lam, there are also two plants with the
capacity of 100,000 cubic meters (100 million liters) per annum in Dung Quat
and Binh Phuoc. Meanwhile, the plant in Phu Tho has filed for bankruptcy.

The two plants have suspended production because there is still no market
for the products. MOIT believes that the two plants will resume operation by
the end of 2017 at the latest.

Of 26 key petroleum traders, five have the E5 mixing system in operation.
These include Petrolimex, PV Oil, Saigon Petro, Mipec and Nam Song Hau
Petroleum Trade & Investment.

Two other traders have set up mixing stations but still have not put
stations into operation. They are Petimex and Thanh Le Import/Export
Corporation.

The total capacity of the 5 operational and 2 non-operational mixing systems
is 6.2-6.7 million cubic meters per annum.
As such, the ethanol material supply would be not enough to make E5 to
satisfy domestic demand.

Petrolimex now has five mixing stations located in five provinces and in
Hanoi, Hai Phong, Da Nang, HCMC and Can Tho, with total capacity of 1.055
million cubic meters per annum.

The distributor is upgrading several existing mixing stations and setting up
more stations in some cities and provinces to raise the total capacity to
3-3.4 million cubic meters per annum.

PV Oil has 12 stations in nine provinces and cities which have capacity of
89,000 cubic meters in total, or 1.068 million cubic meters a year. In the
future, once the number of stations increases to 17 as planned, the total
capacity would be 1.668 million cubic meters.

Though the material supply is still not enough, MOIT said the E5 supply can
satisfy the demand once Vietnam replaces RON 92 with E5.

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Link to Original Article:
http://english.vietnamnet.vn/fms/business/182234/domestic-materials-for-e5-f
uel-in-short-supply.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com