The average retail electricity price excluding VAT was increased to minimum VND1,826.22 and maximum VND2,444.09 ($0.1) from last Friday, according to a decision signed by Deputy Prime Minister Le Minh Khai.
The figures rose 13.7% for the minimum price and 28.2% for the maximum rate. However, retail prices have remained the same.
The new price framework is the foundation for state utility Vietnam Electricity (EVN) to set new retail power prices, said Tran Viet Hoa, head of the Electricity Regulatory Authority of Vietnam under the Ministry of Industry and Trade.
Hoa told local media the new price framework was based on the current global energy crisis, geopolitical tensions in Europe, the appreciation of the USD, inflation pressures, and higher global energy prices. He also noted the current figures do yet fully reflect power production costs.
Official prices of imported coal have been rising since the end of 2021, while coal-fired power accounts for about 40% of Vietnam's energy production, leading to rising costs for Electricity of Vietnam (EVN), the country's biggest power producer and sole distributor.
Moreover, estimated differences in exchange rates for power purchase agreements from 2019-2024 led to a bill of VND21 trillion ($893.24 million), which should be factored into annual power production costs to determine prices, he said.
The ministry’s average retail electricity price has remained unchanged at VND1,864.44 ($0.08) per kWh since 2019. The ministry is urging EVN to finalize reports on power production costs in 2022, including audited financial reports, in order to establish retail power prices for 2023.
EVN has kept its retail power prices stable since 2019. For households, the rates were between VND1,678 and VND2,927 ($0.07-0.12) per kWh. For manufacturing industries, the figures are VND970-3,076 ($0.04-0.13) for different settings.
EVN is forecast to incur a loss of VND31 trillion ($1.31 billion) this year due to surging input costs and stagnant selling prices regulated by the government, the Commission for the Management of State Capital at Enterprises (CMSC) said last December.
EVN has proposed an increase of about 10% for retail prices to stabilize its financial conditions, Deputy Minister of Industry and Trade Do Thang Hai said last month.