The Great Ethanol Fuel Debate: What the Insiders are Saying

A survey conducted by Báo Người Lao Động journalists revealed that consumers in both urban and rural areas are not paying attention to E5 biofuel (E5 RON 92). This trend is observed not just in big cities but also in the countryside and mountainous regions.

Low Discounts and Declining Consumption

Ms. Nguyen Thi Sinh, Director of Yen Bai-based Cong Ty TNHH MTV Xang Dau Chien Thang, shared that the consumption of E5 gasoline is significantly lower compared to RON 95. While their daily sales of RON 95 exceed 500 cubic meters, they only sell 50-60 cubic meters of E5.

The primary consumers of E5 are those who use it for their grass-cutting machines and old motorcycle models. If the situation doesn’t improve, the company might consider discontinuing the sale of E5 gasoline.

In Ho Chi Minh City, many gas stations have stopped selling E5 years ago, and only Petrolimex outlets maintain 1-2 E5 pumps. Male customers with older vehicles or those seeking cheaper options choose E5, while female customers and newer car owners prefer RON 95.

Mr. Le Dang Trinh, who owns two gas stations in Go Vap and Tan Phu districts, shared that he used to sell E5 when the government promoted it. However, after nearly two years, he decided to stop selling it due to declining sales.

Similarly, Mr. Van Tan Phung, Chairman of Cong Ty CP Dau Khi Dong Nai, shared that his company, which operates over 30 gas stations in various provinces and cities, had to stop selling E5 after just one year. They suffered losses due to excessive inventory, as each E5 pump has a 5,000-liter storage tank.

A representative from a gasoline distribution company explained that since the price difference between E5 and RON 95 is not significant, both rural consumers and gas station owners are indifferent towards E5. As a result, E5 sales have been consistently declining year after year.

Mr. Ngo Hong Y, Head of the Trade Management Department of Ho Chi Minh City’s Industry and Trade Department, shared that out of the city’s 500 gas stations, E5 used to account for 25%-26% of total gasoline consumption during the peak period in 2018-2019. However, this proportion has now dropped to just 8%-10%.

“The revenue from selling E5 is lower than that of RON95, and the discounts are also less attractive. The sharp decline in sales has led to high inventory levels and significant losses for gas stations. Many have stopped selling E5, and only a few, such as Petrolimex and Saigon Petro, continue to offer it,” Mr. Y informed.

Lack of Incentives and Promotion

According to Mr. Y, consumers are hesitant to use E5 due to previous concerns about its quality. Gas station owners are also less inclined to promote it as customers prefer RON95, and the price difference is not significant enough to encourage them to actively market E5.

“There is a need for mechanisms and policies to encourage the business community and consumers to use E5. This includes tax and credit policies for investors in ethanol production (E5 is a blend of 95% RON92 and 5% anhydrous ethanol) and tax incentives for E5 consumption. Along with this, there should be more aggressive promotion of E5’s safety, cost-effectiveness, and environmental benefits to gradually change consumer behavior and encourage the voluntary choice of biofuel,” Mr. Y suggested.

According to the E5RON92 user guide, biofuel is a mixture of traditional unleaded gasoline (RON92, Euro 2 standard) and 5% bioethanol. Some companies argue that many countries, such as Brazil, Norway, Sweden, and Thailand, have adopted higher blends like E20-E30 and even E80, which are considered more environmentally friendly due to the higher ethanol content.

Mr. Trinh Quang Khanh, Vice Chairman of the Vietnam Petroleum Association, stated that the association would soon promote the implementation of Decision 49/2011/QD-TTg on Euro 5 emission standards.

Mr. Khanh added that the association has been working with the US Grains Council and other related associations to develop solutions and proposals for the competent authorities to organize the business of E10 and B10.