EVN proposes four options for electricity price increases

The Electricity of Vietnam (EVN) has submitted to the Ministries of Finance and Industry and Trade four options for electricity price increases with the proposed highest price increase of 14 percent and the lowest price increase of six percent.

Under the options proposed by EVN, there are four scenarios for electricity price increase in 2010 which would occur depending on the coal price increases set by the Vietnam Coal and Mineral Industries Group (Vinacomin).

In Option 1, if the coal price increases by 138 percent over the current price, the electricity price will increase by 14 percent.

With Option 2, the electricity price will increase by 9 percent only if the coal price increases by 47 percent.

With Option 3, the electricity price will increase by nearly seven percent, if the coal price rises by 15 percent. And in the last option, EVN plans the electricity price increase of six percent, in case coal becomes 10 percent more expensive than now.

EVN said that the electricity price increases prove to be inevitable, because Vinacomin plans to set overly high prices of coal, while coal is the important input material to produce electricity.

The group said that if it does not raise the sale price of electricity, it will have to incur the additional sum of four trillion dong.

Commenting about the suggested electricity price increases, Tran Viet Ngai, Chairman of the Vietnam Energy Association, said that the proposed price increase of 14 percent as shown in Option 1 is too high, stressing that coal and electricity producers need to follow a roadmap when raising sale prices.

“We believe that the electricity price increase of 10-11 percent would be acceptable. If so, the electricity price would increase from 800-850 dong per kilowatt currently to 1,100 dong which is affordable by businesses,” Ngai said

Meanwhile, while talking with Tien Phong on January 11, 2010, Deputy Minister of Industry and Trade Do Huu Hao said that the ministry’s principle is that the coal price needs to follow the electricity price, not the electricity price needs to follow the coal price as proposed by Vinacomin.

The Prime Minister will make final decision on how high the electricity price should be.

“If the coal price increases to the levels proposed by Vinacomin, the electricity price would have to increase by 18 percent which would be unbearable for the whole national economy,” Hao said.

VietNamNet/TP

Tags: Vietnam energy