The Director of the Electricity Regulatory Authority of Vietnam (ERAV) addresses the issue of recent Vietnam Electricity Group (EVN)'s power price hikes in an interview with DTiNews.
EVN's big losses cause big worries
Dang Huy Cuong, Director of ERAV, under the Ministry of Industry and Trade (MIT), sat down with one of our reporters to answer some questions that have been weighing heavily on the mind of the public.
In the market, petrol prices have gone up and down, yet electricity prices have been on a steady climb. Also, EVN is allowed to increase prices up to four times per year. What is your take on this situation?
As for electricity prices, the Prime Minister has said that increases should not be too frequent. But they should also be steady, so as to reflect rising operational costs and fluctuations in the market. Electricity prices have never decreased because overhead is constantly on the rise. Still, any increases in electricity costs must gain approval from MIT and other Government agencies, who take into account the country's economic situation, before they go into effect.
Considering the changes the rising costs of generating electricity, is it likely that prices will rise again soon?
At present, we cannot predict this because we haven’t received any price rise proposal from EVN.
The public is concerned about EVN's losses in non-core business activities. Is it possible that consumers will have to pay for the companies' losses with their electricity bills?
EVN will not be allowed to cover its non-core investments by raising the price of electricity. However, solutions for this problem will all be subjected to Government approval.
Is EVN losing money in the electricity trade?
Well, the purchase price is 5 cent per kWh, and the current selling price is only around 6.5 cent per kWh. But the electricity market is quite complicated. For this reason EVN is currently only making short-term contracts to avoid future losses.
According to the Academy of Finance, the average per capita electricity consumption in Vietnam is much lower than in neighbouring countries. Our electricity consumption is only two-fifths of Thailand's. Yet, previously, price increases were blamed on the fact that prices were so low that it encouraged more consumption. What is your view on this?
That may be EVN’s excuse. There have been no management agencies who have made that claim. Even though we may consume less energy than neighboring countries, that does not mean we can use it wastefully.