Workers of Vietnam Electricity check the transmission system. The bracket of average electricity retail prices has been increased to 1,826.22 VND per kWh for the floor price and 2,444.09 for the ceiling price. (Photo: VNA) Compared to the previous bracket, which has been applied since 2017, the floorprice increased by 220 VND and the ceiling price by 538 VND per kWh.
The adjustment of the bracket would not immediately impact prices.
The bracket and the inspection results of the electricity production andbusiness costs in 2022 would be the base for the Ministry of Industry and Trade to decideon the average electricity retail price for this year.
The Ministry of Industry and Trade recently urged Vietnam Electricity (EVN) tourgently complete the average electricity retail price plan for this year.
EVN must complete the final resettlement of electricity production and businesscosts in 2022 and have it audited following the established regulations, whichwould serve as the base for the Ministry of Industry and Trade to develop anappropriate roadmap for adjusting electricity retail prices in 2023.
The ministry’s push comes as EVN seeks approval for a proposal to adjustaverage electricity prices to ensure its financial balance in 2023 and protectthe State investment at EVN.
EVN also proposed that the electricity transmission price be increased bynearly 4% to 79,09 VND per kWh, compared to the 74.85 VND per kWh approved inMay 2022. This ensured that the National Power Transmission Corporation did notincur a loss.
In the Ministry of Industry and Trade's report, EVN said it incurred a loss ofaround 31 trillion VND (1.3 billion USD) in 2022.
If the electricity retail prices were kept the same, EVN might incur a loss ofup to 64.9 trillion VND in 2023, which would cause the group to struggle withbalancing the operating cash flow.
Deputy Minister of Industry and Trade Do Thang Hai said at the Government’smonthly meeting late last week that the adjustment of electricity prices wasregulated by the Prime Minister’s Decision No 24/2017/QĐ-TTG dated June 30,2017.
If the changes in input costs made the average electricity retail priceincrease or decrease by 3% or more, the electricity was allowed to be adjustedcorrespondingly. If the adjustment were 10% higher than the current rate, theMinistry of Industry and Trade and the Ministry of Finance would check andreport to the Prime Minister for a decision.
He said that because the electricity price had huge impacts on the macroeconomyand daily life, the ministry asked EVN to work with relevant agencies tocarefully assess the impacts of the adjustments on the macroeconomic situationand each group and customer to develop a roadmap to adjust electricity pricesappropriately in 2023.
Regarding the loss of EVN, Hai said that the Prime Minister asked theCommission for the Management of State Capital at Enterprises to cooperate withrelevant ministries and agencies to study tackling measures besides increasingelectricity prices.
Also at a conference last week, Prime Minster Pham Minh Chinh said that theelectricity prices in Vietnam must be carefully calculated to ensure theharmonisation of targets.
Phung Duc Tung, Director of Mekong Development Research Institute, said that anincrease in electricity prices would happen sooner or later because thepressure of increasing input costs for electricity production had not shown anysigns of cooling down.
He said that increasing electricity prices to the market level was also a wayto promote private investment in the electricity industry.
The current average electricity retail price was 1,864.44 VND per kWh (0.08 USDper kWh), which has remained unchanged since 2019.
According to Globalpetrolprices, this price was 50% lower than the Philippines,which had the highest electricity price in the region at 0.172 USD per kWh andalso lower than Indonesia, Thailand, and most developed countries. Electricityprices in Vietnam were higher than in some countries, such as Laos, Russia,Bangladesh, India and Turkey./.
VNA
