Retail power prices will be rise by between 10%-15.6% in 2012

At an NA press conference on November 24, the minister said that the price power prices would see a much more modest increase, of 4.6%. However, on November 25 he explained that he had only been referring to increases in the cost of production. 

He noted that the retail price hike in 2012 must be calculated based on total production costs, adding one-fourth of the Electricity Group of Vietnam (EVN)’s loss in 2010, VND8.04 trillion (USD384.7 million). A third of this loss due to exchange rate fluctuations in 2010. Another large part he attributed to taking over substandard rural electricity grids from local authorities.

“The price of electricity will be calculated using the factors I've mentioned. The increase is expected to be more than 10%, but less than 15.6%," Hue added. 

The Government is now considering whether the price of electricity should be changed one time for the entire year, or if it should be adjusted every quarter.

Hue assured that the social and business impacts of any price change will be taken into account.

The minister was cited by VOVNews as saying demand for electricity is increasing in Vietnam, but the power sector will be unable to attract domestic and foreign investment if retail prices are not set at appropriate levels.

Such price adjustments are unavoidable, said Hue, adding that the state cannot subsidise the power sector forever.