CFL in Saigon: January 2007

Singapore (Platts)--8Sep2006

Vietnam authorities have officially banned the use of acetone as an

additive in gasoline, a Hanoi-based industry source said Friday.

     The directive on the ban was issued September 7 by Vietnam's Directorate

for Standards and Quality, said an official from state-owned importer Vietnam

National Petroleum Corp., better known as Petrolimex.

     The ban, which comes into immediate effect for all imported gasoline,

also covers blending of acetone gasoline.

     "The government is very concerned about the consequences [of acetone in

gasoline]," the Petrolimex official said.

     "They [the government] still don't know the full extent of damage to

health," he said. The official added that this was the first known case of

acetone being added in higher-than-accepted amounts to gasoline.

     Acetone is a solvent that can be used as an additive for boosting octane

levels in gasoline. It is not typically specified in gasoline sales contracts.

A high amount of acetone in gasoline, however, can affect the rubber seals of

vehicle engines.

     Earlier, Vietnamese importers Saigon Petroleum and Pygemaco, in

anticipation of a government ban, inserted a no-acetone clause in their new

contracts for October gasoline imports.

     Others will follow suit in their upcoming tenders to buy gasoline.

     Added to this, all gasoline importers have either informed or warned

their suppliers that they will not accept acetone in gasoline and that

shipments scheduled for September delivery would likely be rejected if the

material is found to contain acetone.

     Vietnamese importers have implemented mandatory testing for acetone in

gasoline import cargoes from August 31.

     Ho Chi Minh City's Department of Science and Technology concluded last

week that acetone in some recent batches of imported gasoline was behind the

large-scale breakdown of motorcycles in the city. The conclusion followed

tests conducted by the department on samples taken from retail stations.

--Irene Tang, irene_tang@platts.com

CFL in Saigon