Getting ready to pump bio-fuel only

17:09 | 17/11/2017 Industry

(VEN) - The country’s petroleum sector is readying to go over to E5 bio-fuel and RON95 mineral petrol instead of RON92 petrol from January 1, 2018, as ordered by the prime minister. 

getting ready to pump bio fuel only
A reasonable price gap should be created to encourage consumers to use E5 bio-fuel

Sufficient supply

According to Deputy Minister of Industry and Trade Hoang Quoc Vuong, Vietnam will need 250,000-270,000 tonnes of pure ethanol (E100) to produce about 5.4 million cu.m of E5 bio-fuel for sale annually.

Vietnam currently has four ethanol production plants, four of which are based in Dong Nai and Quang Nam provinces and have total capacity of 200,000cu.m or 200 million liters of ethanol per year, sufficient for blending 3.9 million cu.m of E5 bio-fuel annually. The other two ethanol plants, Dung Quat and Binh Phuoc, have been temporarily shut down and are preparing to resume operations later this year to supply the market with about 200,000cu.m of E5 bio-fuel annually.

“I believe existing plants can produce enough E5 bio-fuel to entirely replace RON92 petrol from January 1, 2018. However, we still allow petroleum wholesalers to import E100 ethanol to maintain market competition and protect customer interest,” Deputy Minister Vuong affirmed.

In terms of infrastructure, the five petroleum wholesalers with E5 bio-fuel blending stations include the Vietnam National Petroleum Group (PetroVietnam), the PetroVietnam Oil Corporation (PVOIL), the Ho Chi Minh City One-Member Limited Liability Oil and Gas Company (Saigon Petro Co., Ltd.), the Military Petroleum Corporation, and the Nam Song Hau Trading Investing Petroleum Joint Stock Company. These businesses are capable of supplying the market with more than three million cu.m of bio-fuel annually.

Reasonable price, ensured quality

In the past, bio-fuel sold at much lower prices compared with mineral petrol. In recent years, however, due to continuous drops in global prices, the gap was reduced to about VND150 per liter (compared with RON92 petrol), and VND700 per liter (compared with RON95 petrol).

To encourage consumers to use bio-fuel, Deputy Minister Vuong said the Ministry of Industry and Trade (MoIT) would coordinate with the Ministry of Finance on a suitable pricing policy to create a reasonable price gap between E5 bio-fuel and mineral petrol.

The Directorate for Standards, Metrology and Quality will be responsible for managing at a state level all E5 bio-fuel testing and certifying organizations and conducting inspections on the quality of E5 bio-fuel products. According to a directorate representative, E5 bio-fuel has been marketed widely in some localities for three years and consumers appear satisfied with its quality. Therefore, Vietnam can be confident of the quality of all E5 bio-fuel products when they are marketed nationwide.

As ethanol is highly hydrated, E5 bio-fuel can cause engine stalls if improperly preserved. Deputy Minister Vuong said the MoIT had worked with petroleum wholesalers and some localities on the construction of adequate facilities for bio-fuel preservation.

Business readiness

A representative of the Hanoi Department of Industry and Trade said that as soon as the government decided to replace RON92 petrol with E5 bio-fuel, the department had informed all petroleum businesses in the city, and they all committed themselves to serious implementation.

Most petroleum businesses are getting ready to pump the new fuel. PVOIL Hanoi Deputy Director Nguyen Duc Nam said the company had prepared for upgrading and expanding E5 bio-fuel production and storage facilities to get ready for large-scale supply from 2018.

PVOIL Hanoi currently has an 80cu.m-per-hour E5 bio-fuel blending station based in the city of Hai Phong’s Dinh Vu Industrial Park. In the future, the company will increase the station’s capacity to ensure a sufficient supply of E5 bio-fuel.

Petrolimex also affirmed that the group would ensure stable supplies of ethanol and build new E5 bio-fuel blending stations. According to Petrolimex Deputy General Director Tran Ngoc Nam, E5 bio-fuel will be available in the group’s distribution network from December 1, 2017 so that from January 1, 2018, the entire network will distribute E5 instead of RON92. “Petrolimex will implement the government’s decision as assigned by the MoIT one month ahead of schedule,” Tran Ngoc Nam said.

A representative from the Binh Son Refining and Petrochemical Company Limited, which manages and operates the Dung Quat Oil Refinery, said the company pledged to supply mineral petrol for petroleum wholesalers to blend E5 bio-fuel.

The MoIT will supervise petroleum wholesalers to ensure sufficient supply and premium quality of E5 bio-fuel products.

Lan Anh