E5 RON92 still flying under locals' radars

13:37 | 21/05/2019
E5 RON92 petrol has performed rather poorly during the two years since its launch, despite the government’s efforts to narrow the price gap with RON95 to fit consumers’ wallets.
e5 ron92 still flying under locals radars
Is low price able to secure E5 RON92 gasoline?

Many petrol stations in Ho Chi Minh City last week temporarily halted selling E5 RON92 petrol (5 per cent ethanol and 95 per cent RON 92), and even replaced some E5 gas pumps by RON95 pumps.

A petrol station of Saigon Fuel JSC on No Trang Long Street (Binh Thanh district in Ho Chi Minh City) on May 15 temporarily stopped selling E5 petrol. Similarly, PV Oil’s three petrol stations on Pham Van Tri (Go Vap district) only sell RON95 petrol.

According to newswire tuoitre.vn, all petrol stations of one fuel firm in South Vietnam do not sell E5 RON92 petrol at all.

Nguyen Van Tiu, general director of Tu Luc 1 JSC,said that trading in E5 RON92 petrol requires substantial investment in the construction of a mixing plant, billions of VND to erect the necessary infrastructure system, and current sales cannot recover these expenses. Accordingly, sales are low and capital returns at a snail’s pace, and wastage rates arehigh.

According to the latest report of the MoIT, the total E5 RON92 petrol consumption in this year’s first three months was 740,000 cubic metres, equalling 37.8 per cent of the total amount of petrol consumed. This number is lower than last year's 3.148 million cb.m, when it made up 42 per cent of the petrol market.

“Therefore, if policies do not provide significant incentives to E5 RON92 over RON95, E5 will find it hard to survive in the market,” said Tiu.

Tuoitre.vn quoted a petrol distributor in the northern province of Vinh Phuc as saying that with 4,000 litres of E5 RON92 petrol, 25-30 litres are wasted, while this is only 5-6 litres for RON95.

“The consumption of E5 RON92 recently fell by 20-30 per cent, leading to increasing stocks and significant costs for the maintenance of containers,” said Tiu. “The business performance of ethanol fuel over the past time has shown that it is really necessary to create a big difference between the price of E5 and RON95.”

Accordingly, the environmental protection tax on E5 RON92 fuel is VND3,610 per litre, only 5 per cent less than the tax on RON95. The Ministry of Industry and Trade (MoIT) also suggested the government to increase the price difference by adjusting the tax rate on E5 RON92 petrol.

By Hoang Van

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