Electricity of Vietnam has proposed increasing electricity prices after losing more than $1.35 billion this year due to soaring input costs.
|EVN has asked to raise the power price |
Deputy Minister of Industry and Trade Do Thang Hai said that input costs for electricity production had increased throughout the world, the region, and Vietnam, at the sidelines of the governmental press conference on December 1.
According to EVN, the corporation reported a loss of $695.6 million in the first half of the year and is estimated to lose $1.35 billion over the whole year.
Accordingly, EVN has just asked for the adjustment of the power selling price, and the Ministry of Industry and Trade (MoIT), the Ministry of Finance, and the Committee for Management of State Capital at Enterprises were considering the proposal.
"The costs of electricity production have increased, so we should adjust the retail price. However, we are considering the rate of the rise and will then propose it to the competent authorities for approval," said Hai.
Without revealing the ratio of increase under EVN's proposal, the deputy minister said that the ratio of rise is beyond the authority of EVN if it is higher than 5 per cent. If the price increases by 3-5 per cent, EVN can make the decision itself, if it is among 5-10 per cent, MoIT will consider it, and if it is higher than 10 per cent, the prime minister will make the decision.
Last week, EVN claimed that the cost of fuel for electricity production, such as for coal, oil, and gas, had increased by three to five times, causing the production and purchasing costs to skyrocket.
The corporation continues facing difficulties balancing cash flow to pay for electricity purchase costs and mobilising capital to invest in projects, affecting EVN's business results in 2023 and the coming years.
In a calculation of EVN in the middle of the year, the average retail price of electricity in 2022 reached 8.3 cents per kWh, which is 2.74 per cent higher than the average retail price of electricity applied since 2019, which is 8 cents per kWh.
According to EVN's subsidiary Northern Electricity Corporation (EVNNPC), the purchase price on the electricity market of the enterprise is currently 10.8 cents per kWh. Meanwhile, the estimated average selling price of electricity for the whole year of 2022 EVN is 7.7 cents per kWh, so EVN has to offset more than 3 cents per kWh sold.
Phan Tu Luong, deputy general director of EVNNPC, said that 2022 was the most difficult year since its establishment. In the first half of this year, EVNNPC lost $204 million.
"It is too difficult for us to suffer a large loss to ensure the progress of electricity payment for EVN, contractors, and partners," said Luong. "The failure to arrange capital to meet investment needs will affect the ability to supply electricity to localities and customers in 27 northern cities and provinces."
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