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Vietnam Today

Government says no to higher electricity prices

Released at: 15:44, 02/06/2016

Government says no to higher electricity prices

Photo: Duc Anh

Monthly meeting of government rejects calls for prices increases and higher fees for BOT projects.

by Ha Nguyen

The government has rejected any increase to electricity prices or fees for build-operate-transfer (BOT) projects in electricity this year.

It will establish an electricity price stabilization fund, similar to the existing oil and gas price stabilization fund, to better monitor electricity prices, the government’s monthly meeting heard.

Prime Minister Nguyen Xuan Phuc, after hearing reports from Minister of Finance Dinh Tien Dung, spoke of the principles of following market mechanisms, ensuring supply, monitoring the price adjustment roadmap, controlling expenditure, and preventing the use of administrative orders in price control.

“It is vital to closely follow the situation, evaluate the effects of price adjustments and monitor the prices of essential commodities to curb inflation within the level set by the National Assembly,” the PM said.

Regarding oil and gas prices, he asked ministries and agencies to follow global oil prices, monitor expenditure and put the price stabilization fund to effective use.

The government’s decisions come at a time when Vietnam recorded the highest inflation rate for five years in May. The consumer price index (CPI) rose 0.54 per cent against April and 2.28 per cent against May last year, according to the General Statistics Office (GSO).

The government is committed to keeping the annual inflation rate at below 5 per cent, Deputy Prime Minister Vuong Dinh Hue told a May meeting with banking and finance agencies.

To keep inflation at between 4 and 5 per cent, Deputy PM Hue asked relevant authorities to work closely to control fiscal and monetary policies in line with economic development. “We will not let inflation escalate in 2016,” he insisted. “Rising inflation in the first few months of the year does not mean we should expect high annual inflation.”

As the economy has shown signs of faltering, the government is trying to spur public investment in a bid to push up GDP growth, which only increased 5.6 per cent in the first quarter; lower than the 6.7 per cent recorded in the same period last year.

Low disbursement of public investment, according to the government’s monthly meeting in May, is considered a factor leading to slowing growth.

PM Phuc therefore asked ministries, agencies, and cities and provinces to report by June 6 on the disbursement of planned public investments for the year. Reports must identify the reasons behind obstacles, if any, during the disbursement process, such as those in investment procedures or project implementation.

The Ministries of Finance and Planning & Investment, together with the Office of the Government, will receive the reports and make proposals to the Prime Minister before June 20 on practical methods to accelerate the disbursement of public investment.

Vietnam remains determined to reach the macro-economic goals set for 2016, with GDP of 6.7 per cent.

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