Vietnam to hike power prices in 2019
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Deputy Minister of Industry and Trade Do Thang Hai said Friday that national utility Vietnam Electricity (EVN) might need to cover an incurred cost of VND20.73 trillion ($892.18 million) between 2018 and 2019.
This include incurred costs of VND5.48 trillion ($235.92 million) this year and projected costs of VND15.25 trillion ($668 million) next year, Hai said.
Incurred cost this year includes exchange rate differences in 2017 of VND3.07 trillion ($132.13 million), payment for water resources exploitation, VND502 billion ($21.6 million) and higher gas prices VND1.91 billion ($82.18 million).
Projected incurred costs next year are based on exchange rate differences this year of VND3.51 trillion ($151.28 million), exchange rate differences 2015 scheduled to be paid next year, VND734 billion ($31.58 million), payment for water resources exploitation, VND502 billion ($21.6 million), and increase in gas costs, VND10.5 trillion ($451.79 million).
Hai said EVN would review its electricity production costs last year in collaboration with government bodies to see if it was lower than current prices and would report to authorities for directions on adjusting next year’s prices.
In July, Prime Minister Nguyen Xuan Phuc had banned any increase in electricity prices and medical fees for the rest of the year, aiming to keep the inflation rate below 4 percent and achieve a GDP growth of 6.7 percent in 2018.
Inflation was at 3.57 percent in the first nine months of this year.
The most recent power price increase in Vietnam was last December, when it rose 6.08 percent to VND1,720.65 (currently 7.4 cents) per kWh.
EVN had a revenue of VND293.18 trillion ($12.61 billion) last year, with VND289.25 ($12.44 billion) from electricity sales, an increase of 8.94 percent from the previous year.
Questions & Answers
Q.What is the total incurred cost that EVN might need to cover between 2018 and 2019?
What is the total incurred cost that EVN might need to cover between 2018 and 2019?
EVN might need to cover a total incurred cost of VND20.73 trillion, which is equivalent to $892.18 million. This figure includes costs from 2018 and projected costs for 2019.
Q.What are the main reasons for the projected cost increases next year?
What are the main reasons for the projected cost increases next year?
Projected incurred costs next year are primarily due to exchange rate differences from this year and 2015, and a significant increase in gas costs. Payment for water resources exploitation also contributes to these costs.
Q.What was the government's aim when it banned electricity price increases earlier this year?
What was the government's aim when it banned electricity price increases earlier this year?
The government banned electricity price increases for the rest of the year to keep the inflation rate below 4 percent. They also aimed to achieve a GDP growth of 6.7 percent in 2018.
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