The Vietnamese government is proposing to reduce the special consumption tax on E5 92 RON gasoline to 9% from 9.5% and on E10 92 RON gasoline to 8.5% from 9%, the Ministry of Finance said in a statement Tuesday, October 21.
These tax incentives are expected to be approved by the National Assembly in the current 35-day session beginning Monday, the statement said.
The proposal is aimed at encouraging consumption of biofuels in the country.
E5 92 RON gasoline, which contains 5% ethanol, will be sold from December 1 in Hanoi, Ho Chi Minh City, Hai Phong City, Da Nang City, Can Tho City, Quang Ngai Province and Ba Ria-Vung Tau Province.
It will be enforced nationwide from December 1, 2015, according to a government decision signed by Deputy Prime Minister Hoang Trung Hai in November 2012.
E10 92 RON gasoline, containing 10% ethanol, will be sold in the five large cities and two provinces from December 1, 2016. E10 will be enforced nationwide a year after that, according to the decision.
The price of E5 92 RON gasoline is currently Dong 22,890/liter ($1/liter), similar to the price of 92 RON gasoline, according to the country's biggest oil retailer, state-owned Petrolimex.
Quang Ngai Province began to replace 92 RON gasoline with E5 92 RON gasoline on September 1 and Da Nang City will do so from November 1, according to a government statement on October 10.
E5 92 RON gasoline will be sold along with 95 RON gasoline at all gas stations, the government said.
E5 92 RON gasoline is supplied by state-owned PetroVietnam's Central Biofuels, which runs a 100 million liters/year ethanol plant at Dung Quat in Quang Ngai.
As of July, only three of the country's 19 oil companies sell E5 92 RON gasoline. There were 169 oil stations selling E5 92 RON gasoline, at around 13,000 stations across the country.
Their sales of E5 92 RON gasoline were estimated to account for one eighth of total normal gasoline sales, the government said in a statement in July.