PV Oil, a subsidiary of state-owned Vietnam Oil and Gas Group, said sales of its biogasoline product has nearly tripled since its official launch in August.
E5 gasoline, a blend of 5 percent ethanol and 95 percent gasoline, has been welcomed by local consumers because it is cheaper and better for the environment, said Nguyen Thi Dieu Hanh, deputy sales manager at PV Oil.
Hanh said her company is currently supplying around 25,000 liters of the ethanol gasoline to the market every day, up from 8,000-9,000 liters a day in the early days.
E5 was first launched in Vietnam in September 2008 on a trial basis, but sales were halted six days later due to administrative problems. The government issued regulations on quality management of biofuel products last year, allowing PV Oil to begin sales of E5 gasoline officially in August.
Hanh said supply is now falling short of demand because production of the gasoline is still small-scale.
"We want to study more from the response of consumers as well as wait for any support policies from the authorities," she said.
Although PV Oil said it has expanded the distribution system since August, there are now only 29 gas stations that sell the product in large cities.
Vietnam Oil and Gas Group plans to supply 240 million liters of E5 to local consumers in 2012 at some 4,300 stations.