Electricity prices increased by 6.08 per cent from December 01 worrying people and firms

By Bao Binh - Dec 02, 2017 | 09:05 AM GMT+7

TheLEADERAccording to the Ministry of Industry and Trade (MoIT), from December 01, 2017, the average retail price of electricity is raised to VND1,720.65 (US$0.08) per kWh, up 6.08 per cent compared to the current average electricity price of VND1,622.01 (US$0.07) per kWh, which worries the people and enterprises.

Electricity prices increased by 6.08 per cent from December 01 worrying people and firms
Electricity prices raised by 6.08 per cent worry the people and enterprises

Nguyen Anh Tuan, Director of the Electricity Regulatory Authority under MoIT said that the adjustment of electricity prices is based on the inspection results of electricity production and business in 2016.

The adjustment also refers to the report on electricity cost in 2016, made by a task force under MoIT with representatives from the National Assembly Economic Committee, the Vietnam Electrical Engineering Association, the Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam Fatherland Front.

The electricity price of VND1,720.65 (US$0.08) per kWh (excluding value added tax) is only the average price. For each group of customers, the electricity prices are regulated in the Prime Minister’s Decision No. 28/2014/QD-TTg dated April 07, 2014 on structure of electricity retail tariff.

The increase in electricity prices in the current context makes people and enterprises worried about the increase in costs of living and production.

In order to raise the electricity prices without much impact on the poor, the Government will support the poor households with their first 50kW/h, equaling VND51,000 (US$2.25) each a month. The total support amount is over VND2.5 trillion (US$110.23 million) a year, Tuan said.

Nguyen Van Thai, Director of Donex Sport of International Joint Stock Company, said that electricity price now accounts for 30-35 per cent of his company’s production cost. Electricity price raised by 6.08 per cent has big impacts on the company as it makes product prices raised, reducing the competitiveness of the company.

Nguyen Manh Hung, General Secretary of the Viet Nam Standard and Consumers Association (VINASTAS) confirmed that the increase in electricity prices not only affects the people's life but also the enterprises, which will raise the prices of commodity.

Regarding this issue, Economist Pham Chi Lan said that electricity prices increased by 6.08 per cent at the moment are at a high rate. Increasing electricity prices will have an impact on curbing inflation and people's livelihoods, as well as on enterprises.