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Trade ministry determined on transition to bio-fuel
Lan Nhi
Monday,  Jul 17, 2017,17:42 (GMT+7)

Trade ministry determined on transition to bio-fuel

Lan Nhi

A man has his motorbike filled with petrol at a local fuel station. The Ministry of Industry and Trade will replace A92 gasoline with E5 bio-fuel early next year - PHOTO: TL

HANOI – The supply of RON 92 petrol will be halted in all cities and provinces across the country from the beginning of next year as the Ministry of Industry and Trade has determined to switch to using E5 bio-fuel and RON 95. However, domestic plants may not secure sufficient ethanol supply for E5 blenders.

Vietnam’s total gasoline consumption is put at 7.4 million cubic meters last year. In particular, E5 bio-fuel reached around 590,000 cubic meters, accounting for a mere 8% of the total while the respective figures for RON 95 and RON 92 were around 6.8 million cubic meters and 4.7 million cubic meters, according to the ministry.

As Vietnam replaces RON 92 petrol, the total consumption of E5 bio-fuel is forecast to leap to about 5.3 million cubic meters next year.

However, two manufacturing plants of Tung Lam Co Ltd., the key suppliers of ethanol in the country, have a combined annual capacity of around 200,000 cubic meters, sufficient for blending 3.9 million cubic meters of E5 a year. The company was able to sell more than 2,000 m3 on a monthly basis last year due to the somber demand for the bio-fuel.

Besides, two ethanol plants of Vietnam Oil and Gas Group, one in Quang Ngai Province and the other in Binh Phuoc Province, have ground to a halt due to hefty losses while its third plant in Phu Tho Province is about to declare bankrupt. These facilities have a total capacity of 100,000 cubic meters of ethanol.

With the plan to phase out RON 92 gasoline, the trade ministry has plans to put the two loss-making plants in operation again, possibly at the end of this year.

Therefore, the ministry’s plan to completely replace A92 with E5 may not work smoothly given the current short supply of ethanol.

Five out of 25 fuel wholesale traders are operating E5 blending stations, with combined capacity of about 6.2-6.7 million cubic meters a year.

They are Vietnam National Petroleum Group (Petrolimex), Petrovietnam Oil Corp (PV Oil), Saigon Petro Co Ltd, Military Petroleum Corporation, and Nam Song Hau Trading Investing Petroleum Joint Stock.

Although ethanol is in short supply, the trade ministry still declared that the production and trade of fuel wholesale companies and E5 blending stations nationwide show ethanol supply for E5 will completely meet the market demand when the A92 petrol phase-out plan takes effect early next year.

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