Fresh energy needed to push hybrid petrol trading industries

The use of bio fuel in Vietnam is yet to grip consumers or producers Photo: Le Toan

The deadline for petrol trading firms to submit such specific plans is June 5, 2013.

The ministry’s (MoIT) Department of Science and Technology reported that no petrol trading firms had detailed plans for blending bio-fuels with petrol, as demanded by the prime minister. Moreover,  most petrol trading firms have not actively upgraded their warehousing facilities, transportation and distribution networks except for PetroVietnam and Saigon Petro, according to the MoIT.

“There is no reason to delay the prime minister’s approved scheme for using bio fuels nationwide by 2015 because the nation’s energy security, the effectiveness of ethanol production projects and cassava and sugarcane farmers’ lives also depend on this framework,” said MoIT Deputy Minister Le Duong Quang.

Under the prime ministerial Decision No53/2012/QD-TTg on the scheme for using bio-fuels released last year, E5 gasoline must be used in seven cities and provinces of Hanoi, Haiphong, Danang, Quang Ngai, Ho Chi Minh City, Ba Ria-Vung Tau and Can Tho from January 1, 2014, and in all other cities  and provinces nationwide from January 1, 2015. Similarly, E10 gasoline must be used in the seven mentioned cities and provinces from January 1, 2016 and across the nation from January 1, 2017.

Nguyen Sinh Khang, deputy general director of state-run PetroVietnam, which has developed three ethanol plants in the country, said that the group had five locations for blending bio-fuels with petrol and four petrol trading firms for E5.

However, PetroVietnam’s on-going ethanol production projects are running at 20 per cent of their capacity due to low consumption.

Foremost, Itochu Corporation that two years ago joined hands with PetroVietnam Oil to build the $80 million Orient Bio-fuel facility in southern Binh Phuoc province, is seeking foreign and domestic partners to take over its 49 per cent stake in the joint venture.

Itochu is the first and so far only foreign partner involved in building ethanol factories in Vietnam.

Khang pointed out that a lack of related legal framework and incentives for bio-fuel producers and petrol trading firms selling bio-fuels had left them in difficulties. They have had to suffer from losses in producing and trading of bio-fuels and could hardly continue their investment projects.

Khang added that bio-fuel producers needed to timely promote the products to domestic consumers through giving them information on quality and related benefits of using bio-fuels.