Fuel Price Hikes to Escalate Costs in Coal, Power Sectors

Price hikes of petroleum products adopted by the Ministry of Trade on April 28 have been intensifying pressure on coal and electricity sectors, which are considering raising their prices to compensate the rocketing input costs, state media reported.

 

Nguyen Van Bien Head of the Planning and Costs Management Board of the National Mines and Minerals Industries Group (Vinacomin) April 28 said that Vinacomin, which is expected to consume about 270,000 tons of oil and 5,000 tons of petroleum this year, will have to burden an estimated cost of VND120 billion ($7.547 million) due to the record-hit price of petroleum whilst coal is traded at 20 per cent less than the production costs.

 

Currently, the Ministry of Finance (MoF) is considering increasing coal prices.

 

Bien added that the group is facing many obstacles in balancing the investment for production in the future and ensuring sustainable incomes for coal miners amid the drop in coal export rates on the world market last year, rising input costs in light of the coal price remaining unchanged since 2003, especially the imminent operation of thermo-power plants which will need a great deal of coal.

 

Meanwhile, petroleum price hikes will cost the Electricity of Vietnam (EVN) an additional VND256.4 billion ($16.125 million) to maintain the set power output, of which EVN’s power plants will suffer a cost of 164.7 billion ($10.358 million) and the remainder is to be non-EVN’s power sources.

 

As planned, this year EVN’s power plants will need 600,000 tons of FO oil and 500,000 tons of DO oil a year.

 

According to the Ministry of Industry, the power sector is seeking approval from the government for electricity price hikes which are expected to be adopted early June or July this year after its task force conducted internet-based public polls.
Capital Security, VNA