Rise in electricity prices ups CPI by 0.72 pct

February 24, 2011 | 16:27

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An increase of 15.28 per cent in electricity prices to an average of VND1,242 /kWh from March 1 will push the country’s consumer price index (CPI) up by 0.54-0.72 per cent.

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According to the Ministry of Industry and Trade (MoIT), an additional 19 trillion VND will be spent on electricity after the price hike. Production sectors will pay more than 9.6 trillion VND of the increase, raising the cost of their products by 0.02-9.03 per cent.

With the hike in power prices, each household is estimated to pay an additional VND21,400- VND140,000 per month depending on their level of consumption.

Each poor or low-income household will receive a subsidy of 40 per cent and 20 percent respectively for the first 50KWh they use each month.

A new move in this policy is to experimentally apply prepaid electricity cards for temporary or short-term purchasers of power, including students and people in rented accommodation.

At present, power prices in Vietnam are still at the lowest in Southeast Asia , standing at around 5.2 cents per kWh (according to the exchange rate of VND19,500 per USD).

These low prices have made power projects unattractive to investors from other economic sectors, which has led to intermittent power shortages in recent years.

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