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Vietnam Today

Power prices rise 8.36%

Released at: 16:28, 25/03/2019

Power prices rise 8.36%

Photo: EVN

Latest hike took effect on March 20.

by Phi Linh

An increase in electricity prices may put upward pressure on inflation but may also help Vietnam attract more private investment in developing power plants, according to SSI Securities.

The latest price hike took effect on March 20, according to the Deputy Minister of Industry and Trade Hoang Quoc Vuong, with an increase of 8.36 per cent, from VND1,720 per kWh to over VND1,864 per kWh, excluding value-added tax.

At the beginning of March, the Ministry of Industry and Trade (MoIT) issued Decision No. 281 increasing prices for power generation this year. Accordingly, prices for power generated at coal-fired power plants are set to range from VND1,677 and VND1,896 per kWh, excluding some taxes, seaport fees, and infrastructure. The ceiling price for power generated at hydropower plants will increase by VND20 per kWh to VND1,100 per kWh, excluding taxes.

Mr. Vuong said the price rise is a solution to improving the finances of the electricity sector. Electricity prices have now been adjusted seven times since 2010. The previous adjustment was at the end of 2017.

According to Decision No. 24 issued by the Prime Minister, there was to be an adjustment in 2018. Prices remained unchanged, however, in order to stabilize the macroeconomy, despite the fact that increasing costs have greatly affected the power sector, Mr. Vuong said.

He said Electricity of Vietnam (EVN) reviews every expense and input factor that affects power prices. The Prime Minister also gave permission to raise electricity prices in the first quarter of this year. He noted that among government targets this year are stabilizing the macroeconomy and curbing inflation to achieve GDP growth of more than 6.8 per cent. The power price adjustment was calculated to meet the targets approved by the National Assembly.

The government has stipulated that a less-than-10 per cent increase in electricity price comes within the jurisdiction of MoIT after receiving the Prime Minister’s permission.

According to MoIT, the country’s electricity price was more than 7 cents before the adjustment. Meanwhile, the price in India and China stands at 8 cents, Laos 9 cents, Indonesia 10 cents, and Canada 11 cents.

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