HCMC – The Ministry of Industry and Trade has been gathering feedback on a proposal of Vietnam Electricity Group (EVN) for increasing electricity prices.
A spike in electricity prices will be weighed carefully, Deputy Minister of Industry and Trade Do Thang Hai said at a press conference on January 3.
Currently, the adjustment cycle of electricity prices is six months, and the last adjustment was made on March 20, 2019. Meanwhile, the adjustment cycle of fuel prices is just 10 days.
The Government required EVN to regularly update input costs and recalculate the average retail prices of electricity. If the input costs increase by three percentage points or more, the retail prices should be raised accordingly and vice versa.
Electricity pricing is different from fuel prices as the input costs depend on weather in each season, Hai explained.
During the rainy season, the production costs are low as the hydroelectric reservoir receives a large amount of water. Meanwhile, thermal power plants must increase their capacity during the dry season, resulting in input costs soaring.
Therefore, the adjustment of electricity prices will not follow the fuel price adjustment cycle and must be reported to the Government for further consideration.
Previously, EVN proposed increasing electricity prices as the State utility racked up losses of over VND31 trillion in 2022.
The electricity production prices surged in 2022 due to the Ukraine-Russia conflict, escalating inflation pressure, exchange rate volatility, and surging coal prices.