Market and product

With little cooperation from fuel wholesalers, many ethanol refineries around the country have found few domestic consumers and had to export most of their products.
Luu Quang Thai, Chair of Dong Xanh JSC, the country’s fist biological fuel producer, said the company had inaugurated the Dai Loc Ethanol Refinery with an annual capacity of 125 million litres in the central province of Quang Nam last April.

He said E5 bio fuel, which was gasoline mixed with 5 percent of ethanol, could not have its own filling stations but had to be distributed along with the gasoline retail system.

But he said domestic consumption was very poor.

He said although the refinery had aimed at distributing its production equally between exports and domestic consumption, it had to export as much as 90 percent of production as the domestic market showed no interest on bio fuel.

“I wonder why the domestic market has refused to use such economical and biologically useful fuel,” he said. Other ethanol producers also said they had to ship their products to China.

In fact, PetroVietnam Oil has been selling E5 bio fuel since August 2010 at its 106 stations countrywide.

Deputy CEO Le Xuan Trinh said the company had planned to use all of its stations to sell bio fuel this year

But PetroVietnam Oil’s effort is not enough to ease ethanol producers’ concern since Petrolimex, the country’s largest fuel distributor holding 60 percent of the market share, is still not likely to join the E5 bio fuel market.

Pham Anh Tuan, CEO of Phuong Dong Bio fuel Co., the operator of an ethanol refinery in the southern province of Binh Phuoc, said the non-cooperation of the fuel distributors could waste hundreds of millions of litres of ethanol.

A fuel distributor based in HCM City said most fuel dealers had refused to sell E5 bio fuel since they would have to change their equipments.
Thai of Dong Xanh Co agreed, saying most petrol stations had hesitated to change their tanks and machinery.

Other fuel distributors and dealers said they would have to spend a big sum on building the infrastructure for mixing ethanol with gasoline.

But Tuan of Phuong Dong Co said the main cause was a government policy.

He said a draft plan by the Ministry of Industry and Trade said that not until 2015 would E5 bio fuel become mandatory nationwide.

Fuel experts said when the bio fuel market became completely synchronised it would greatly benefit consumers as well as the economy.

E5 bio fuel is currently 200 dong a litre cheaper than A92 gasoline, they said, adding it would also help the country save hundreds of millions of dollar on fuel imports.

But the greatest benefit was that bio fuel could help reduce 30 percent of CO emission, they said.
Tuoi Tre