PV Oil, Petec, and Saigon Petro will start to sell a biofuel made of 95 percent gasoline and 5 percent ethanol in Ho Chi Minh City and five other major cities next month.
PV Oil and Petec, affiliates of the Vietnam National Oil and Gas Group (PetroVietnam), will sell E5 at VND15,490 a liter, VND500 cheaper than A92 gasoline.
In the beginning they will sell the fuel at 24 gas stations in Ho Chi Minh City, Hanoi, Hai Duong, Hai Phong, Binh Duong, and Ba Ria-Vung Tau before expanding the network to 4,000 nationwide by 2012.
The VND500 price gap will be maintained for six months to a year before aligning the rate with the market.
The two companies are building three ethanol plants in Phu Tho, Quang Ngai, and Binh Phuoc that are expected to go on stream next year, producing a combined 300 million liters annually.
Saigon Petro will start the sale in the middle of August but at just VND50 less than the conventional fuel.
But Vietnam National Petroleum Corp (Petrolimex), which has a 60 percent share of the gasoline market, will not sell bio-fuel, according to Bui Ngoc Bao, its general director.
The burning of E5 emits less hydrocarbon and carbon monoxide than A92 gasoline, the internal-combustion engine lab at the Hanoi University of Technology said.
Many countries have blended 5-58 percent of ethanol into gasoline to be less dependent on fossil fuels, Dr Le Kim Lien of the Vietnam Institute of Industrial Chemistry said. But if the blend rate is more than 10 percent, engines have to be redesigned.
Brazil is the world leader in using mixed-combustion engines that can use ethanol of up to 95 percent.
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