Vietnam's only remaining ethanol plant will be merged with the oil refinery at Dung Quat as a cost-cutting measure at a time of low demand.
BSR, a PetroVietnam subsidiary that owns the Dung Quat oil refinery, and Petrosetco, another subsidiary that owns the Dung Quat Bio-Ethanol, are wrapping up procedures for the merger.
The ethanol plant, which has a capacity of 330 tons per day, has been on a trial run since the start of last year.
The US$80-million plant, while awaiting the country's switch to biofuels by 2015, has been exporting most of its output.
News website VnExpress quoted BSR chairman Nguyen Hoai Giang as saying the company plans to produce E3 fuel, a blend of 3 percent ethanol and 97 percent gasoline, for use in the local Quang Ngai Province this year, and E5 for the whole central region a year later.
The cost of producing ethanol is around VND15,000 per liter while the export price is VND13,000.
Low domestic demand and the losses on exports caused the country's two other producers Binh Phuoc Ethanol and Dai Tan Ethanol -- to temporarily close down and others to stop construction.
Biofuels remain unfamiliar to most people while their prices are nearly high as that of 92-RON, the most popular gasoline variety grade in the country.
The government plans to make the use of biofuels obligatory in seven cities by 2015.
The country, which produces 30 percent of the gasoline needed for domestic consumption, is expected to less rely on imports once it switches to domestically-made ethanol.
Vehicles using ethanol emit less pollutants than normal.
Like us on Facebook and scroll down to share your comment