Power price hike proposed

Electricity of Vietnam has just asked for the nod to lift electricity prices this month.

According to Electricity of Vietnam (EVN) deputy general director Duong Quang Thanh, it asked the Ministry of Industry and Trade (MoIT) to hike prices to help the power sector achieve financial balance, avoiding biting losses from 2012 and gradually settling its losses from 2010.

“The group is calculating power cost’s input parameters for the price hike and will then submit them to the government for consideration,” Thanh told Vnexpress.

Thanh said capital was the power sector’s stinging problem in ensuring sufficient power supply for southern region from 2013-2015, since EVN was bogged down in losses.

EVN’s losses exceeded VND8 trillion ($386.47 million) in 2010 and stood at VND2 trillion ($96.6 million) in the first eight months of 2011.

MoIT Deputy Minister Hoang Quoc Vuong assumed the bottleneck was electricity prices.

“The capital issue of the power sector will not be tackled when there is still no remedy for the electricity price puzzle,” Vuong said.

Power prices rose 15.28 per cent from early March, 2011. EVN recently continually claimed it starved of capital and asked for further power price upward revisions.

However, economists warned the government to be cautious with ‘sensitive’ decisions like ones on upward price revisions of essential goods such as power, coal and petrol in the face of current economic vulnerabilities.

The consumer price index (CPI) growth of 0.93 per cent in August was lower than in the previous month but it contributed to worsening the January-August CPI growth which mounted to 15.68 per cent against December 2010 and 23.02 per cent on-year.

The inflation was initially set at 7 per cent for 2011 by the National Assembly. It was revised twice this year to 15 per cent in early June and then to at most 17 per cent in late June to fit actual development conditions.  -VIR

Tags: Vietnam energy, Vietnam energy industry, Vietnam Energy sector