In the future, E5 fuel will be cheaper than fuel 92-RON.— Photo www.baogiaothong.vn

HA NOI (Biz Hub) — Prime Minister Nguyen Tan Dung has agreed to set the price of biofuel E5 lower than that of the more popular Ron 92 gasoline in Viet Nam.

The move aims to encourage the consumption of the biofuel. The PM also agreed to extend more support to the biofuel from the country's petroleum price stabilisation fund.

Thus, one litre of E5, which is 95 per cent RON 92 and five per cent ethanol, will be VND300 to VND500 (US$0.014-0.023) cheaper than RON92.

RON 92 is being sold at VND15,670 ($0.73) per litre since the last petrol price cut in the country last week.

Last December, Viet Nam's major cities and provinces of Ha Noi, HCM City, Hai Phong and Da Nang, as well as Can Tho, Quang Ngai and Ba Ria-Vung Tau started selling E5 on a trial basis, while the rest of the country plans to start selling the fuel this year.

Local media also reported that PM Dung has ordered the finance ministry (MoF) to review tax regulations on biofuels, including raising export tariffs on ethanol and cassava in order to improve the domestic biofuel production, instead of importing the product.

Researchers at the Hanoi University of Technology have found that while E5 does not harm vehicle engines, it helps the vehicles to accelerate faster and cause less carbon emission than those powered by RON 92.

The country's largest E5 producer, Binh Son Refining and Petrochemicals can produce two million tonnes of the fuel per year to meet 30 per cent of the demand in Viet Nam.

The MoF said that currently, there is no importer of E5 in Viet Nam. — VNS