The government has ordered Hanoi, Ho Chi Minh City and six other cities and provinces to switch completely to a locally-produced biofuel from June.
A statement from the Government Office said consumption of the 5-percent ethanol blended E5 has not met the target.
Deputy Prime Minister Hoang Trung Hai said in the statement that the eight cities and provinces need to make more efforts to promote the fuel, which has been proved to be safe, economical and environment friendly.
He urged other cities and provinces to cut sales of the popular RON 92 gasoline by half and replace that with E5 from June.
Also in the list are the cities of Hai Phong, Da Nang, and Can Tho, the central provinces of Quang Nam and Quang Ngai and the southern province of Ba Ria – Vung Tau.
Quang Ngai, home to the country’s sole refinery and one of its three ethanol production plants, started selling E5 in September 2014, and the others in December.
E5 now sells at VND15,339 (68 cents) per liter, 4.3 percent cheaper than 92-RON.
While the government has not set an attractive price, many gas stations poorly promote the new fuel and are not willing to invest in new pumps suitable for E5 since they are afraid of losses.