At the press conference held by Electricity of Vietnam Group (EVN) on late July 20, Dinh Quang Tri, EVN’s deputy general director said that about 6.6 trillion dong will be allocated to compensate for loss of electricity price due to forex rate difference in four years, from now till 2015.
EVN’s five-year development investment and business production plan in 2011-2015 approved by the prime minister Nguyen Tan Dung on July 10, 2012 stated that EVN’s business and finance plan in this stage will allocate losses from electricity business and production activities, which were not included in the electricity price from 2011 backwards, in electricity price in 2012 and 2013 and at the same time distribute forex rate differences in 2012-2015 period under the guidance of the Ministry of Finance (MoF).
Thus, in 2010 and 2011, due to highly increased power demand, EVN had to use oil for electricity generation, causing a loss of 11 trillion dong, at the same time, the forex rate difference as of December 31. 2011 was about over 26 trillion dong.
Explaining this issue, Tri said that the forex rate difference is objective factor but EVN was compensated for the difference while other groups and companies were not compensated for this difference. The original is electricity price issue.
For example, Vietnam National Petroleum Group (Petrolimex) is selling fuel at market prices while EVN’s electricity prices are decided by the government.
Currently, most of EVN’s loans ($74 billion) are the government’s loans and then the government is re-lending EVN, so the full costs must be amortised gradually into the electricity price and the consumers have to bear.
As directed by the prime minister, from now till 2015, forex rate difference of about over 26 trillion dong will be allocated into the electricity price by EVN in four years, averagely about 6.6 trillion dong per year.
The level of increase will be based on the economic situation of each period, the financial situation of EVN, and this will be audited annually. Particularly, for the loss of 11 billion dong from oil purchase for electricity generation, EVN will deduct in the group’s profits but not include in the electricity price.
Answering the questions from the press about the electricity price adjustment mechanism in the near future, Tri said a series of circulars will be amended to ensure adequate power supply for the economy with transparency price mechanism as the current electricity prices have not kept pace with the market yet.