, Vietnam

Vietnam plans electricity price hike

The Electricity Regulatory Authority of Vietnam is developing plans to increase electricity price in 2011. This will be based in coal price and prices of other inputs.

According to Mr. Tran Viet Ngai, Chairman of Vietnam Energy Association, electricity price in 2012 and 2013 has to increase to 7 to 8 cents per KW from 5.3 cents.

"If electricity price and the profit rate of enterprises are too low, the power sector shall be at a loss, unable to borrow from foreign investment and no one shall invest in the power sector of Vietnam. The increase should be implemented from early 2011. In the coming dry season, if there is no electricity, damages and losses due to power shortage shall be even bigger", said Mr Ngai.

According to Vietnam Electricity Corporation or EVN, the current electricity price of 5.3 cents per KW  is too low, and should be increased to 6.5 cents, which has been approved by the Government for 2011 to ensure profitability and attract investors.

“In 2011, if we are not affected by natural disasters like this year, there will be more water for hydro-power reservoirs, and the 30 per cent increase in electricity price shall be sufficient to compensate for the electricity sector”, shared an official of the power sector.

But Minister of Finance Vu Van Ninh said that while the price of electricity in 2011 will certainly be increased, the amount and time of increase should be calculated so as not to affect low-income people, and not distort the economy because of the subsidized price.

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