Vietnam to Raise Power Prices by 8.92 per cent to VND948.5/kWh

The Vietnamese government has recently decided to hike domestic retail electricity prices by 8.92 per cent to VND948.5 (US$5.57 cents) per kWh excluding value-added tax (VAT) from current VND860 (US$5.05 cents) from early March, sate media reported.

 

The new rate will be applied to all consumers who used power from the national grid.

 

Under a decision signed on February 12 by Prime Minister Nguyen Tan Dung, the government from 2010 will subsidize 35 per cent-40 per cent of the new price for poor households and low-income families used the first 50 kWh of electricity in order to avoid negative affects from the price soar.

 

Rural power traders who could not sell electricity at the new price due to their conditions will be allowed to temporally apply ceiling prices of VND700/kWh until September this year.

 

From 2010, ceilings prices will be gradually applied to production and service sectors, allowing electricity companies to sell power at negotiated prices below the ceiling prices under the guidance of the electricity regulator; meanwhile retail price for households will still be set by the government.

 

The Ministry of Industry and Trade (MoIT) will coordinate with the Ministry of Finance to adjust power price every year based on trade, production and the consumer price index.

 

The ministries will approve prices that change less than 5 per cent from the average passed by the previous year. If the adjusted level is 5 per cent or higher, it will be approved by the Prime Minister.

 

Households and production enterprises along the country are estimated to spend an additional VND4.8 trillion (US$282.35 million) on electricity due to the price hike, the café.vn said. (Vietnam & World Economy, News)