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Electricity prices could jump 18% from March
The Ministry of Industry and Trade has proposed the Government raise electricity prices by 18.03 percent
The rate is the lowest among the six rates the ministry submitted to the Government for consideration.
Of these, three were submitted by the ministry: 30.3, 26.3 and 18.03 percent; And another three by the Electricity of Vietnam Group (EVN): 40.8, 24.69 and 18.3 percent.
If approved, the rate will be applied from March 1 and take the average power price to VND1,271 (US$0.065) per kWh.
With the 18.03 percent increase, the electricity sector may get no profit, even suffers losses, but such a rate will have minimal effects on the country’s economic development and the life of people, the ministry said.
However, the power price scheme could be revised before the Prime Minister’s consideration, since all the proposed rates were calculated before the State Bank of Vietnam raised the interbank rate to VND20,693 per US dollar from VND18.932, according to Nguyen Tien Thoa, Head of the Price Management Department under the Finance Ministry.
Meanwhile, economic expert Pham Chi Lan said the 18.03 percent increase would put a big pressure on the life of people given that the country’s average income per capita remains low (US$1,200 in 2010).
“Power prices have never before been raised beyond 10 percent,” she said. “Therefore, a too high increase will lead to a remarkable increase in prices of many consumer goods, and will make the target of restraining inflation more difficult to reach.”
Power prices were lifted up by 6.8 percent to VND1,037 (US$0.05) per kWh in March last year after the Ministry of Finance and the Ministry of Industry and Trade proposed a 10.7 percent increase.
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