E10 gasoline is only 490 VND/liter cheaper than regular gasoline.
On the afternoon of May 21st, domestic gasoline and diesel prices were adjusted simultaneously. Immediately after the new prices were applied, Mr. Hoang Van Dan (a resident of Ho Chi Minh City) filled up his tank with E10 gasoline at a gas station on Nguyen Dinh Chieu Street and said: "Filling a 50-liter tank, E10 gasoline is only about 24,500 VND cheaper than RON95. If you're riding a motorbike, filling up with 4 liters means the difference is less than 2,000 VND. A difference of less than 500 VND per liter isn't attractive enough."
Nevertheless, he believes that the use of E10 is an inevitable trend, as from June 1st onwards, conventional gasoline will no longer be available on the market. "I support the policy of using clean, environmentally friendly fuels and believe in the government's policies. However, for people to truly trust and proactively choose it, an attractive price is needed," Mr. Dan shared.
Sharing the same view, Ms. Nguyen Bao Linh (residing in Tan Hoa Ward, Ho Chi Minh City) believes that the price of E10 gasoline needs to be 15-20% lower than conventional gasoline to be attractive enough. A difference of just 2,000-3,000 VND/liter would be enough to encourage consumers to switch, instead of spending a lot on advertising.
The price of E10 bioethanol fuel is currently nearly 500 VND/liter lower than the price of conventional gasoline.
PHOTO: NHAT THINH
According to Circular 50 of the Ministry of Industry and Trade, from June 1st, E10 bioethanol fuel – a type of fuel consisting of 10% ethanol and 90% mineral gasoline – will be widely distributed nationwide. In the draft resolution on accelerating the roadmap for using E10 bioethanol fuel, the Ministry of Industry and Trade proposes that the Ministry of Finance study adjusting the special consumption tax and environmental protection tax to create a sufficiently attractive price difference between bioethanol fuel and mineral gasoline.
At the same time, the agency also proposed policies to support the sustainable and long-term development of the biofuel industry.
The Ministry of Industry and Trade will be the lead agency coordinating the supply of ethanol and base gasoline for blending E10. Currently, the environmental protection tax on gasoline is 2,000 VND/liter.
Because the ethanol component in biofuels is not subject to this tax, the environmental tax per liter of E5 is approximately 1,900 VND, while for E10 it is approximately 1,800 VND. In addition, the special consumption tax applied to E5 is 8%, and to E10 is 7%, lower than the 10% rate for RON95 mineral gasoline.
If the Ministry of Industry and Trade's proposal is approved, the price of E10 gasoline could be significantly lower than that of conventional gasoline in the near future, thereby increasing competitiveness and encouraging people to switch to using biofuels.
E10 should be 1,000 - 1,500 VND/liter cheaper than conventional gasoline.
Supporting the Ministry of Industry and Trade's view on an "attractive price" for E10 gasoline, Ms. Nguyen Thi Thanh Tram, a gasoline retailer in Ho Chi Minh City, analyzed: Vietnam currently has 5 ethanol production plants with surplus output, so promoting the blending and consumption of E10 gasoline is a reasonable direction. However, with E10 about to be sold widely from June 1st, there are still many practical issues that need to be considered. For example, some vehicles, especially older models, are not yet fully compatible with biofuel. For retailers, the current price difference of 500 VND/liter is not enough to compensate for losses and maintenance costs of machinery and equipment. In addition, E10 gasoline has the characteristic of being prone to water separation, especially when the weather changes or when vehicles are left unused for a long time. If consumers do not fully understand the properties of fuel, misunderstandings can easily arise, leading them to blame gas stations for selling substandard fuel, directly affecting the business's reputation.
Based on that reality, Ms. Tram believes that disseminating knowledge about E10 gasoline to the public is absolutely necessary. At the same time, the selling price of E10 needs to be lower than that of conventional gasoline, with a sufficiently large difference, at least three times the current price. To achieve this, further reductions in environmental protection tax and special consumption tax applied to E10 gasoline, as proposed by the Ministry of Industry and Trade, are necessary.
Mr. Van Tan Phung, Chairman of the Dong Nai Petroleum Association, said that gas stations will comply with the regulations on distributing E10 fuel. However, the management agency should allocate a few more months for the transition period to monitor the market and actual operational capabilities. Even the main distributors have only been piloting blending for a relatively short time. Meanwhile, the current price difference is not large enough to incentivize consumers to switch.
Supporting the development of E10 fuel not only aims to promote a clean fuel and reduce dependence on fossil fuels in the context of a volatile global energy market, but also creates momentum for the long-term development of the domestic ethanol production industry. This, in turn, contributes to the consumption of agricultural products, enhances the value chain of production, and improves the income of farmers.
Associate Professor Dr. Nguyen Thuong Lang
Recalling the lessons learned from E5 gasoline, Mr. Phung argued that the main reasons for its gradual loss of market share revolve around price and trust in quality. "There was a time when E5 accounted for 35-40% of the retail gasoline market share, but then it gradually decreased to 10-15%, and many stores stopped selling it. With E10, the advantage is that it uses RON95 Euro 3 base gasoline, which is much higher quality than the RON92 base of the previous E5. However, sellers are still worried about high losses, while consumers are concerned about compatibility and quality. If the price of E10 were about 1,000-1,500 VND/liter lower than conventional gasoline, the transition to biofuels would happen faster and more smoothly," Mr. Phung said.
Associate Professor Nguyen Thuong Lang, from the Institute of International Trade and Economics (National Economics University), also believes that consumers will only change their habits when they see clear economic benefits. "E10 gasoline is currently only a few hundred dong/liter cheaper, so it's difficult to create a significant difference in the market. To promote the transition, the upcoming government resolution must include a policy guaranteeing the price. The price of E10 must be low enough to create a real incentive for users," Associate Professor Nguyen Thuong Lang recommended.
According to this expert, biofuels are environmentally friendly products that contribute to promoting the nation's green energy transition. Reducing or eliminating the environmental tax on E10 is in line with the trend of green energy transition.
"The Ministry of Industry and Trade's proposal is essential. The Ministry of Finance needs to urgently review the tax structure per liter of bioethanol fuel for our fuel greening strategy to succeed. Gasoline is an essential commodity, not a luxury item. Therefore, the special consumption tax applied to gasoline also needs to be reconsidered," Associate Professor Dr. Nguyen Thuong Lang emphasized.
Source: https://thanhnien.vn/giam-thue-de-giam-gia-xang-e10-185260522192848769.htm
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