A representative of a petroleum distribution company who asked to be anonymous said ‘everything was still in a muddle’. 

He said enterprises have to speed up the building of fuel mixing units to be sure that biofuel is available at half of the filling stations at their distribution chains. Meanwhile, they are not sure if E5 can be sold and they don’t receive any technical assistance.

“If both A92 and E5 are available at filling stations, E5 will not sell because people will still choose A92, even though A92 is more expensive,” he said, adding that people don’t think E5 is good for their engine.

“HCM City should follow the way Can Tho City is going. It is necessary to force 100 percent of filling stations to sell E5,” he said.

Meanwhile, another distributor in the north said that the current price difference of VND500 per liter will not help boost the sale of E5. 

The price gap should be as high as VND1,500-2,000 as applied in some other countries to encourage people to use E5.

He also thinks that people would buy A92 instead of biofuel if only 50 percent of filling stations sell E5.

“The decision that 50 percent of filling stations must sell E5 will not work,” he said. “People won’t buy E5 unless E5 is the only choice for them.”

An analyst warned that the biofuel sale plan may fail completely as the regulation is ‘not strict enough’.

“Petroleum distributors and sales agents will feel not encouraged enough to sell E5 because the profits are not large enough. Meanwhile, the success of the plan heavily depends on sellers,” he said.

“The state needs to do more to help distributors sell E5,” he added. “For example, all public vehicles must be forced to use biofuel.”

The Vietnam Petroleum Association (VINPA) agrees that it is necessary to force state agencies, from central to local, must buy E5 for vehicles using the state’s money.

Phan The Rue, chair of VINPA, said in order to encourage E5 consumption, ministries should apply reasonable tax policies to ensure a stable selling price of E100. 

Besides, the state needs to set up a long-term strategy on developing the material growing area to ensure a stable supply of materials for making E100.

There are seven ethanol plants which can churn out 535 million liters a year.

VINPA has also suggested to cut down an environmental tax to make E5 price cheaper by VND700-1,000 than A92 to encourage consumption of E5.

Tien Phong