Vietnam Electricity wants power prices to be dynamic, based on production cost
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Vietnam Electricity wants power prices to be managed in the same way as fuel by taking into account the changing costs of production and not fixed at certain levels.
Input costs surged to high this year, with oil and gas prices rising by double-digits and coal by 600%, EVN CEO Tran Dinh Nhan said at a meeting on December 12.
Yet electricity prices remained the same as in 2019, he said.
He blamed this for his company’s severe financial challenges and the risk of not paying its partners.
“Eventually EVN’s credit ratings will be lowered. The company will have difficulty accessing loans and this will affect national security.”
The government allows EVN to adjust prices by up to 5% a year, a 5-10% change needs approval from the Ministry of Industry and Trade and anything more than 10% requires the Cabinet’s green light.
EVN also wants Power Development Plan 8 to be approved quickly so that it can start building new plants and grids to keep up with demand.
Questions & Answers
Q.What is the main change Vietnam Electricity is proposing for power prices?
What is the main change Vietnam Electricity is proposing for power prices?
Vietnam Electricity wants power prices to be dynamic, adjusting with production costs, rather than being fixed. This is similar to how fuel prices are managed, reflecting the changing expenses of generation.
Q.Why is Vietnam Electricity facing financial difficulties?
Why is Vietnam Electricity facing financial difficulties?
The company is experiencing severe financial challenges because its input costs, such as oil, gas, and coal, have significantly risen this year. However, electricity prices have remained unchanged since 2019.
Q.What are the current rules for Vietnam Electricity to adjust retail prices?
What are the current rules for Vietnam Electricity to adjust retail prices?
Vietnam Electricity can increase prices by up to 5% annually on its own. Price changes between 5% and 10% require approval from the Ministry of Industry and Trade, while increases over 10% need the Cabinet's approval.
Q.Besides price changes, what else does Vietnam Electricity want to happen?
Besides price changes, what else does Vietnam Electricity want to happen?
Vietnam Electricity also wants Power Development Plan 8 to be approved quickly. This would allow the company to begin constructing new power plants and grids to adequately meet the growing electricity demand.
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