Electricity price to increase by 6.8 percent

The Ministry of Finance, the ministry assigned to appraise pricing, has confirmed an electricity price increase of 6.8 percent which will take effect as of March 1, 2010.

VnExpress has reported that the ministry has confirmed that the Government has agreed in principle to the 6.8 percent electricity price increase.

The decision is based on the 2010’s coal price, the raw material for making electricity. The coal dust No 5 which Vinacomin (The Vietnam Coal and Mineral Industries Group) sells to electricity generators will increase by 28 percent from 405,500 dong per tonne to 520,000 dong per tonne, while the coal dust No. 4B will increase by 47 percent from 442,000 dong to 648,000 dong.

As such, with the electricity price increase of 6.8 percent, the average electricity selling price in 2010 will increase to nearly 1,037 dong per kilowatt. The current electricity price increase is 970.9 dong per kilowatt.

Having confirmed the price increase, the Ministry of Finance has also affirmed the Government’s principle to support poor households in using electricity.

Deputy minister of industry and Trade Do Huu Hao has also confirmed with VnExpress an electricity price increase of over five percent, to commence from March 1. However, Hao said exact price increases will still be discussed by his ministry and the Ministry of Finance and will be made public in a press conference to be discussed later this week.

Hao said that the document guiding the retail electricity price is being built up, and that it will show the detailed impacts of price increases on different branches of the national economy, on the consumer price index and the life of people.

The latest electricity price increase was decided in March 2009. The price of electricity for household use increased by 13 percent, while the price of electricity for production use rose by 6-7.5 percent in comparison with the 2008’s levels. At that time, the electricity price increase forced producers to spend 2,300 billion dong on production, according to the Ministry of Industry and Trade.

VietNamNet/VNE

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