Electricity prices for 2012 unveiled

November 25, 2011 | 10:51

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Electricity prices are expected to increase by 4.6 per cent in 2012, Minister of Finance Vuong Dinh Hue told the National Assembly on November 24.

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The calculations are based on the current price levels plus input costs and foreign exchange rate fluctuations, said Hue.

He described the new pricing level as acceptable for most consumers when efforts are made to rein in inflation and stabilise the macro-economy. However, he said the selling prices for the poor and low-income earners will remain unchanged.

According to the minister, the power sector finds it hard to attract investment capital unless it adjusts retail prices.

Power consumption demand is increasing in Vietnam, and we will not be able to attract domestic and foreign investment to develop the sector if retail prices are not set at appropriate levels, said Hue.

He quoted Electricity of Vietnam Group (EVN), the leading power supplier, as saying that in 2010 the group faced total losses of VND23 trillion as a consequence of high prices requested by power companies and high foreign exchange rates.

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

Electricity prices were adjusted once in March 2011, with the average price increasing to VND1,242/kWh from VND1,077.

However, some input costs were not included in the adjustment, and accumulated losses would be used to calculate electricity prices in the following years.

VOV

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