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Vietnam Today

Electricity prices to rise by lowest level

Released at: 14:24, 12/11/2017

Electricity prices to rise by lowest level

Illustrative image (Photo: news.zing.vn)

Deputy PM directs ministries to manage a host of prices.

by Quang Huy

Deputy Prime Minister Vuong Dinh Hue has asked the Ministry of Industry and Trade (MoIT) to quickly complete its plan to raise electricity prices by the lowest level.

He said the country’s CPI in the first nine months of the year was under control, creating favorable conditions for adjusting the prices of certain items.

“CPI growth in the January-September period showed that inflation this year could meet the National Assembly’s target of less than 4 per cent,” he said. “There will be many factors affecting prices in the year-end months, however, such as increases in input and materials as well as rising demand for the Tet holiday.”

He added that price management should be cautiously conducted to limit inflation to less than 4 per cent, reducing costs for businesses and supporting economic growth.

For petroleum products, Deputy PM Hue asked the ministry to cooperate with the Ministry of Finance (MoF) in continuing to manage the market under Decree No. 83 from 2014 and suitably using the price stabilization fund to control prices, especially on holidays and when there is a continuous increase in world petrol prices, to avoid high inflation.

He asked the Ministry of Agriculture and Rural Development to instruct localities to closely follow changes in the market. The ministry should cooperate with MoIT in ensuring a balance in the supply and demand of essentials such as rice, food, and sugar.

The Ministry of Transport will undertake calculations with the MoF to negotiate and reduce fees at build-operate-transfer (BOT) toll booths.

Deputy PM Hue also directed the Ministry of Health to instruct localities to complete adjustments to healthcare prices outside the payment scope of the health insurance fund, noting that the government should closely manage prices in aviation, education and training, construction, pharmaceuticals, milk for children under six years old, and seaport services.

The central bank, meanwhile, was directed to continue managing monetary policy flexibly in cooperation with financial policies to curb inflation.

Just five months ago, Deputy Minister of Industry and Trade Do Thang Hai told a press conference on the sidelines of the monthly government meeting that there were no plans in place to raise electricity prices.

Though retail electricity prices in Vietnam are among the lowest in Southeast Asia, the government has been reluctant to allow increases. Vietnam’s power tariffs have not been adjusted for two years, resulting in a lack of investment capital for developing new power resources.

Retail prices have remained at VND2,141 ($0.1) per kWh since March 2015, while electricity wholesale prices increased 2 to 5 per cent last year, with the highest reaching VND1,562 ($0.07) per kWh and the lowest VND1,107 ($0.05).

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