Why is the price of E10 gasoline continuously falling?

E10 gasoline prices continued to fall in the price adjustment period on June 11th, marking the third consecutive reduction since the end of May.

In the price adjustment on June 11th, the price of E10 gasoline decreased to 22,060 VND/liter. Photo: Phuc Hau.

In the latest fuel price adjustment on June 11th, the inter- ministerial committee of Industry and Trade - Finance continued to reduce fuel prices, bringing the price of E5 RON 92 gasoline down by 450 VND/liter to 21,330 VND/liter, E10 RON 95-III gasoline down by 270 VND/liter to 22,060 VND/liter, diesel down by 990 VND/liter to 25,870 VND/liter, and mazut down by 1,040 VND/liter to 18,600 VND/kg.

Notably, this marks the third consecutive price drop for gasoline since the end of May, following reductions on May 28th and June 4th. Currently, gasoline prices in Vietnam are lower than those in other countries in the region.

This development has resulted in the price of E10 gasoline being significantly lower than when it was first widely introduced, thereby helping to reduce fuel costs for consumers and transportation businesses.

World oil prices continue to fall.

Explaining the reasons for the consecutive decrease in gasoline and diesel prices, the Ministry of Industry and Trade stated that the global oil market during this price adjustment period was influenced by many factors.

The first factor is the protracted nature of the negotiations to end the conflict between the US and Iran; escalating tensions in the Middle East as the US and Iran continue to exchange attacks, Iran and Israel attack each other but then declare a ceasefire; and the ongoing military conflict between Russia and Ukraine…

Authorities said the aforementioned factors have caused world petroleum product prices to fluctuate in recent days, varying depending on the specific product.

Specifically, the average world price of refined petroleum products between the price adjustment period of June 4th and June 11th was $116.39 /barrel for RON 92 gasoline used to blend E5 RON 92 gasoline (a decrease of $0.37 /barrel, or 0.32%). Similarly, 0.05S diesel was at $139.578 /barrel (a decrease of $2.31 /barrel, or 1.63%); and fuel oil was at $614.54 /ton (a decrease of $25.47 /ton, or 3.98%).

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The operator also stated that as of June 11th, gasoline prices in neighboring countries of Vietnam continued to be higher: Thailand at approximately 34,560 VND/liter (government subsidized), Cambodia at 30,743 VND/liter (government subsidized), Laos at 37,560 VND/liter, and China at 33,948 VND/liter (government-controlled), while Vietnam was at 21,332 VND/liter.

Regarding diesel fuel, Thailand currently charges around 33,505 VND/liter (government subsidized), Cambodia 33,033 VND/liter, Laos 33,144 VND/liter, China 30,893 VND/liter (government-controlled), while Vietnam charges 25,877 VND/liter. Overall, fuel prices in Vietnam remain lower than in neighboring countries and many other countries in the region.

Establishing a stabilization fund.

During this price adjustment period, the regulatory agency also allocated funds to stabilize fuel prices (provisional funding from the State budget). Specifically, the regulator allocated 100 VND per liter of bio-gasoline; and 200 VND per liter (or kilogram) for diesel and fuel oil. This allocation also helped reduce domestic fuel prices during the recent adjustment period.

The Ministry of Industry and Trade and the Ministry of Finance are continuing to closely monitor market developments to announce appropriate fuel prices, in accordance with directives, and to promptly propose solutions to the Government and the Prime Minister.

Regarding ensuring the nationwide supply of petroleum products, the Ministry of Industry and Trade stated that it will coordinate with relevant agencies to inspect and monitor the fulfillment of responsibilities by petroleum businesses in ensuring the supply of petroleum products to the market, and will strictly handle any violations (if any).

From June 1st, the transition to using E10 bioethanol fuel has been implemented nationwide. In addition, E5 RON 92 gasoline will continue to be produced and supplied until the end of 2030.

According to the announcement, after 4 days of nationwide implementation, the country has consumed approximately 151 million liters of gasoline. This includes 141.5 million liters of E10 gasoline and 9.5 million liters of E5 gasoline. Thus, the average daily consumption is about 35.4 million liters of E10 gasoline and 2.4 million liters of E5 gasoline, an increase compared to the average daily gasoline consumption before June 1st, which was 32 million liters.

To improve the operational mechanism and promote the transition to biofuels, the Ministry of Industry and Trade is submitting a resolution to the Government to address obstacles related to the implementation of E10 gasoline. One notable point is the proposal to add E10 RON 95-III gasoline to the list of products for which base prices are announced, and to use this fuel to replace RON 95-III mineral gasoline in the management of gasoline prices.

According to the draft, the base price of E10 gasoline will be calculated based on the international market price of RON 95 gasoline combined with the price of fuel ethanol, the mandatory blending ratio, and related cost factors such as blending, transportation, storage, losses, and other reasonable costs incurred in the supply chain.

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In addition, the regulatory agency stated that it will continue to research and refine tax and fee policies to maintain a suitable price difference between E10 gasoline and conventional gasoline. This is considered an important tool to encourage people and businesses to prioritize the use of biofuels, thereby contributing to reducing emissions and promoting the goal of green energy transition.

Source: https://znews.vn/vi-sao-gia-xang-e10-lien-tuc-giam-post1659015.html