E5 petrol distribution hampered
By Minh Tam - The Saigon Times Daily
HCMC – Local gasoline enterprises are facing difficulties in convincing filling stations to sell E5 bio fuel due to lack of specified incentives for trading, resulting in a modest distribution system of less than 150 points of sale across the country.
Le Xuan Trinh, deputy general director of Vietnam Oil Corporation (PV Oil), said the company has 125 filling stations selling the bio-fuel in 32 provinces and cities which is a tenfold rise since August, 2010. Over 16 million liters of the product has been consumed so far, including 12 million liters in the January-October period.
These are modest numbers, though, compared to the whole country’s gasoline consumption, Trinh told the Daily on Tuesday.
Petec Investment and Trading Company is selling E5 petrol, a mixture of 5% ethanol and 95% A92 gasoline, at 11 points of sale, a rise of three since last August. According to Nguyen Thi Bang Tam, head of Petec’s E5 department, the enterprise cannot expand its distribution system as it doesn’t have a mixing station.
Consumption of the product is still limited now as it is just VND100 cheaper than normal kinds of petroleum, not VND500 per liter like before.
“E5 gasoline used to be a favorite of taxi drivers but cannot attract customers any more given the narrow price difference,” Tam added.
Meanwhile, agents and general agents are not interested in the product. “It’s hard to convince them to sell E5 gasoline over concerns on revenue and reputation,” said Trinh.
In fact, agents cannot make big profits from E5 fuel due to unattractive discount rates, small revenue and costly investment. They also have to cope with wastage as there is alcohol in the product.
Nguyen Van Thuong, owner of Hoang Nguyen filling station in HCMC’s Binh Thanh District, said gas stations have to invest in tanks to sell E5 fuel.
“This is not a simple requirement as procedures are very complicated,” Thuong said.
As specific support policies for the trading, preparation and distribution of E5 petrol have not been issued, enterprises initially have to meet difficulties due to high costs for production, wastage, sales and advertising, said Trinh of PV Oil.
However, E5 gasoline suppliers are expanding projects to help speed up trading. PV Oil is building four mixing systems, while Petec expects to launch its mixing station into operation soon.