From 1/6, E10 biofuel – a type of fuel blended with 10% ethanol and 90% traditional gasoline – will be widely sold nationwide. This rollout comes as authorities seek to boost its adoption amid current market challenges.

In the draft Resolution on accelerating the roadmap for E10 biofuel use, the Ministry of Industry and Trade proposed that the Ministry of Finance research adjusting special consumption tax and environmental protection tax rates. The aim is to create a sufficiently attractive price difference between biofuel and traditional gasoline, thereby enticing more consumers to switch.

Currently, each liter of traditional gasoline is subject to an environmental protection tax of 2,000 VND and a special consumption tax of 10%. Biofuel receives more favorable treatment because the ethanol component is exempt from environmental protection tax. Accordingly, the environmental protection tax per liter of E5 gasoline is about 1,900 VND, and for E10, it is 1,800 VND. The special consumption tax applied to E5 is 8% and to E10 is 7%, which is lower than for traditional gasoline.

However, the actual price difference between E10 and traditional gasoline is not considered substantial enough to entice consumers to switch. Previously, E5 biofuel consumption encountered similar obstacles. This fuel type once held about 40% of the retail gasoline market share, but it has declined to 15-20% due to the small price difference and consumer perception, according to the Ministry of Industry and Trade.

An employee at a gas station pumps fuel for a customer. *Photo: PVOIL*

From 1/6, the inter-ministerial committee of the Ministry of Industry and Trade and the Ministry of Finance will determine the constituent elements and announce the base price for E10 gasoline to facilitate price management.

In the draft, the Ministry of Industry and Trade outlined the base price formula for E10. Its main components include the average price of RON 95 finished gasoline and the price of fuel ethanol, as determined by the Ministry of Finance. Additionally, the base price includes transportation costs, premium, storage, loss, and fixed profit and business costs.

Costs for importing gasoline to Vietnamese ports, domestic premium, and transportation costs from refineries will apply similarly to the current RON95-III product. Fixed profit and business costs will follow the mechanism currently used for E5 RON92.

Key traders must accurately report data related to ethanol, blending ratios, transportation costs, storage, and other reasonable expenses for calculation.

PVOIL began selling E10 biofuel at 1,000 retail stores nationwide from 15/5. Meanwhile, Petrolimex stated that by mid-may, approximately 80% of its stores were selling E10, with the entire system conversion completed before 20/5.

The Ministry of Industry and Trade assessed that E10 implementation will help reduce emissions, promote a green transition, and contribute to energy security.

Phuong Dung