The Ministry of Industry and Trade has just submitted to the Government a draft resolution aimed at removing obstacles to accelerate the nationwide rollout of E10 bioethanol fuel from June 1st.
Accordingly, the Ministry of Industry and Trade proposes allowing petroleum wholesalers to hire testing services from qualified units to check the quality of petroleum products, instead of being required to invest in their own testing laboratories as is currently the case.
This is seen as an important solution to reduce initial investment costs for businesses, especially given that many organizations have reported that the cost of building a testing laboratory can reach tens of billions of VND.
Regarding pricing, the Ministry of Industry and Trade proposes that it and the Ministry of Finance coordinate to determine the constituent elements of the base price of E10 gasoline to serve market management. In the initial phase, the product chosen for announcing the base price is E10RON95-III.
According to the proposed mechanism, the base price of E10 gasoline will be calculated based on the world market price of RON95 gasoline, the price of fuel ethanol (E100), and other reasonable costs for blending, transportation, storage, and other expenses. The price of fuel ethanol will be determined and announced by the Ministry of Finance to serve as the basis for price calculation.
Specifically, the Ministry of Industry and Trade determines world gasoline prices based on the average international trading price of RON95 gasoline between two price adjustment periods. Costs for importing gasoline from abroad to Vietnam, business premiums for domestically produced gasoline, and transportation costs from refineries to ports will be applied using the same mechanism as for RON95-III gasoline. Meanwhile, the standard profit margin and standard business costs will be applied according to the levels of E5RON92 gasoline.
The draft also requires primary distributors to report fully, truthfully, and promptly all data related to ethanol, blending ratios, receiving, transporting, storing, and loss costs, etc., to determine the base price of E10 gasoline, and to be legally responsible for the accuracy of the data.
Another notable point in the draft proposal is that the Government assigns the Ministry of Finance to study adjustments to the special consumption tax and environmental protection tax to create a sufficiently attractive price difference between bioethanol and fossil fuels. This is considered a key factor in encouraging consumers to switch to E10 in the context of the current cautious market sentiment.
According to the Ministry of Industry and Trade, the biggest challenge currently lies not only in the selling price but also in the supply of ethanol and blending capacity. Calculations show that if E10 is implemented nationwide, the demand for fuel ethanol will be approximately 92,000-100,000 m3 per month. Meanwhile, the total domestic production of E100 currently only reaches about 25,000 m3/month, and the actual operating capacity of factories is only about 30-40% of their design capacity.
This means Vietnam will have to import approximately 75,000 cubic meters of ethanol per month for at least the next year to compensate for the shortfall.
Nevertheless, the Ministry of Industry and Trade acknowledges that the amount of ethanol needed for blending in the initial phase is still short by about 10,000 - 15,000 m3.
In terms of infrastructure, currently only three companies have been licensed to blend E10: Petrolimex, PVOIL, and Saigon Petro, with a total capacity of approximately 700,000 m3/month. If the projects awaiting licensing are completed, the total blending capacity could increase to over 1.15 million m3/month.
The Ministry of Industry and Trade believes that issuing a specific resolution at this time is necessary to "unlock resources," quickly resolve technical, testing, and supply chain issues, and avoid the risk of a shortage of blending capacity when the entire market switches to using E10 from June 1st.
Source: https://tienphong.vn/de-xuat-co-che-tinh-gia-xang-e10-tu-ngay-16-post1844637.tpo
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