Electricity price hike manageable: ministry

The 15 percent increase in average electricity prices won’t affect consumers and businesses much, the Ministry of Industry and Trade has assured.

Consumers and businesses would only have to pay an extra 165 dong per kWh, the ministry said in a press conference to announce an electricity price increase Saturday.

Even for electricity-insensitive industries, increased electricity prices would push input costs up to 1.33 percent at most, officials said in an effort to assure the public as news about a plan to raise electricity prices has caused concerns recently.

Poor households would also receive a VND30,000 per month to help pay for electricity.

This increase in electricity prices means that the government is to remove its current subsidy for the first 50kWh for all consumers.

Hoang Quoc Vuong, Vice Minister of Industry and Commerce said by removing the long-standing subsidy for all, the government would be able to channel unfair support to wealthy households to over 3 million poor ones nationwide while helping the state-owned Electricity Corporation of Vietnam (EVN) cut losses.

(“Poor” households have a monthly income of 400,000 dong or less in rural areas or VND500,000 per month or less in cities.

With the VND30,000 support, poor households in effect would have to pay VND20,000 for 50kWh per month.)

According to Vuong, EVN has been running huge losses, the specific figures of which were to be released after audit.

“For EVN to avoid losses, electricity prices must increase by 60 percent this year,” Vuonsaid.

The 15.3 percent increase was thus a very cautious step.

Vuong said increasing electricity prices would also encourage more efficient use of electricity as well as investments, which were sorely needed to increase national electricity supply.

In recent years, EVN has struggled hard to keep up with increasing electricity demand.

Last year, due to droughts, the country suffered a shortage of 1.3 billion kWh in dry seasons.

The ministry said if demand increased by less than 15 percent this upcoming summer, EVN would be able to curb.

If, however, demand increases by 18 percent as expected, the country will suffer a shortage of 2 billion kWh.- Tuoi Tre

Tags: Vietnam electricity, Vietnam electricity market, Vietnam energy