Biofuel fails to set consumers’ imagination alight

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According to PV Oil’s oil product business division deputy head Nguyen Thi Dieu Hanh, though PV Oil’s 50 filling stations were currently selling bio-fuel E5 (a mixture of 95 per cent of conventional non-lead gasoline and 5 per cent ethanol), a sharp rise compared to 30 in August 2010 when the fuel first came onto the market, actual sale volumes fell short of expectations.

PV Oil sold 4.2 million litres of bio-fuel E5 in the last five months of 2010. Despite a double growth in the number of filling stations so far the year, fuel E5’s sales volume remained unchanged of approximately 4.2 million litres only, Hanh said.

Just around 10 per cent of customers at Hanoi’s Thai Thinh filling station - the first E5 selling filling station in the country - reportedly demanded the bio-fuel. 

In fact, bio-fuel E5 is sold by around 80 filling stations under PetroVietnam’s member companies PV Oil and Petech, a small figure against around 14,000 filling stations currently operating across the country. Vietnam’s biggest petroleum retail network of the Petrolimex with around 6,000 filling stations is yet to sell the bio-fuel.

One of the reason behind fuel E5’s modest sales was the lack of guiding regulations on the production, transport and storage of bio-fuel E5 by the Ministry of Science and Technology. Besides, in light of the Environment Law effective from 2012, bio-fuel E5 is listed in the category of items incurring high environmental tax, though the government has stimulated the production of petrol combined with ethanol to minimise hurting the environment.

“The government needs to increase support to bio-fuel E5 trading firms to bolster sales,” Hanh said.

According to Hanh, around VND50 million ($2,400) would be needed to make existing filling stations satisfy particular technical standards for storage and sale of bio-fuel E5.

PV Oil was reportedly stepping up efforts to achieve the target of having 100 per cent of its filling stations sell bio-fuel E5 in 2011, according to a PV Oil representative. Thereby, the number of such filling stations by PV Oil alone expects to reach 400 in 2011.