Electricity of Vietnam Group (EVN) has recently proposed three plans to increase electricity price: at less than 5 percent, 10 percent and between 5-10 percent. The government has to offer many solution packages to rescue enterprises. If the electricity price is adjusted up, businesses will be unbearable, according to the local newswire Phap Luat TP HCM (HCM City Law).
However, economic specialists said that in the current difficult context of enterprises together with high inventory, electricity price hike will put enormous pressure in companies.
Replying the reporters on May 10, head of Price Management Department (Ministry of Finance-MoF), Nguyen Tien Thoa, said that so far the input factors have caused an increase in electricity price by nearly 3.3 percent (42.9 dong per kWh). Explaining about this, Thoa said “as calculated by Price Management Department, component factors of electricity price include forex rate (up 0.6 percent), gas fuel (up 10.4 percent), fuel oil (FO) up 40 percent and coal (down 0.3 percent)”. In addition, Thoa added EVN now has “pending” expenses from forex rate difference at over 15 trillion dong and difference from electricity purchase at high price in 2010 that are not included in electricity price. Therefore, these amounts will be calculated and handled in the future by ministries of finance and industry and trade.
A source said that EVN has submitted Ministry of Industry and Trade (MoIT) three plans to hike electricity price. First, the electricity price will be raised at less than 5 percent. Second, the electricity price hike will be at 10 percent. Third, electricity price will be raised between 5-10 percent.
However, a leader of the Electricity Regulatory Authority of Vietnam (ERAV), a department under the MOIT, said that the agency has not received any proposals from EVN yet.
“The adjustment of electricity price or not will be calculated and considered carefully by inter-ministerial of finance and industry and trade, basing on the goal to put the electricity price under the market mechanism but still ensure inflation control target”, the leader said.
As stipulated in the Decision No 24 of the government on electricity price regulation, in case the difference of average electricity price caused by input factors at less than 5 percent against the current electricity price, EVN will calculate and add the difference in average electricity price and production costs to adjust the average electricity price by maximum 5 percent, after reporting MoIT.
Thus, with the increase of electricity price by 3.3 percent caused by input factors, the electricity price increase will be only the matter of time.