Ho Chi Minh City, in probably one of its boldest moves to boost the use of greener fuel, will completely ban the most common gasoline grade 92 RON.
All 514 gas stations in the city will have to switch to the 5-percent ethanol blend E5 on November 30.
Le Ngoc Dao, deputy director of the municipal Department of Industry and Trade, said the move was part of a plan to promote the locally-produced bio-fuel in seven cities and provinces.
The city began to sell the E5 blend at 58 fuel stations in December 2014.
However, the new fuel grade has not been welcomed by many drivers, who are not well informed of the benefits of using bio-fuel products.
Many fuel traders fear that their revenues will fall when other stations are still selling the popular, and slightly more expensive 92-octane grade.
Since December, two more stations have started selling E5 but at the same time, five others have stopped selling it.
HCMC Department of Industry and Trade reported that more than 4.5 million liters of E5 are sold each month, equal to just 3 percent of gasoline demand in the city.
The price of E5 fell by 4.1 percent to VND18,800 (86 cents) in a nationwide fuel price cut on Tuesday.
The pump price for the country’s best-selling grade 92 RON was cut to VND19,300 (88 US cents).
Fuel prices have been raised four times and reduced five times this year.
Vietnam banned the use of the low-grade 83 RON in January 2014 due to environmental concerns. Low-grade gasoline is still sold widely in many Asian cities.