Viet Nam News
Đỗ Thắng Hải, Deputy Minister of Industry and Trade, spoke to the newspaper Thời báo Kinh tế Việt Nam (Việt Nam Economic Times) about measures to promote the consumption of E5 fuel.
Could you explain about the production and sales of E5 biofuel at present?
The Government has set a goal that as of June 1, 2016 only E5 biofuel consisting of 5 per cent ethanol and 95 per cent petrol may be sold in eight provinces and cities, including Hà Nội, Hải Phòng, Đà Nẵng, Quảng Nam, Quảng Ngãi, HCM City, Cần Thơ and Bà Rịa-Vũng Tàu. For other provinces and cities the target is to make it available in at least 50 per cent of petrol stations.
However, until now only three provinces - Quảng Ngãi, Quảng Nam and Đà Nẵng - have reached that goal. For example, in HCM City, by April 26, 2016 only 279 of 526 petrol stations sold E5 – accounting for less than 50 per cent.
At present, ethanol - the main component of E5 fuel - is supplied by two biofuel plants of the Tùng Lâm Company.
Their production capacity is 150,000 tonnes a year, sufficient to produce more than three million tonnes of E5 per year. Price is estimated at about VNĐ13,000 per litre.
I can say that the E5 biofuel already on the market has been rated of high quality, meeting all the required specifications.
What are the challenges facing the production and distribution of E5?
The biggest challenge is the price of ethanol - which is rather high at VNĐ13,000 (US$0.58) per liter - due to the constant increase in the price of cassava – the main raw material in the production of ethanol. In the last five years, the price of one kilogram of cassava has been VNĐ3.500 to VNĐ4.500 per kg. Sometimes, it jumps to VNĐ5.000 per kg.
In the meantime, the drop in world crude oil price to less than $30 a barrel has become an enemy of the E5 fuel.
In addition, not many Vietnamese petrol companies are interested in selling E5 fuel because the discount percentage for E5 fuel is not attractive to wholesalers and the retail price is not attractive to consumers.
In my opinion, to promote the use of E5 fuel it is important to launch a campaign to raise awareness of the fuel’s advantages.
How should we promote the consumption of E5 fuel?
We should adopt feasible measures. At the same time, the Government is implementing policies to lower the prices of E5 fuel in order to encourage consumption while supporting distributors and producers to ensure a steady supply.
Last but not least, ethanol producing companies should do their best to cut down their production cost so that the cost of E5 fuel is reduced and can compete with the price of the popular RON A92 fuel. -- VNS