The Ministry of Industry and Trade has made a proposal to the Government to raise electricity prices by 18% this year.
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| If the proposal is approved, the price of power will be VND1,271/kWh |
Beginning March 1, if the proposal is approved, the price of power will be VND1,271/kWh, up from VND1,058/kWh.
The proposal came after the prime minister requested that the Ministries of Finance, and Industries and Trade come up with a proper “roadmap” to the price increases that would be necessary for such commodities as electricity, coal and petroleum.
According to the Ministry of Industry and Trade (MoIT), this proposed increase of 18% is the most feasible because it is the most modest. The two other proposed increases were of 26.3% and 30.3%.
The ministry expects that the price hike could drive up revenues for this year by VND19 trillion (USD918.18 million).
The increase is intended to help the industry recoup capital from investments in infrastructure projects during this year, which will also bring an expected 15% increase in demand for power.
This could also mean an further increases in the prices of goods. Manufacturers in Vietnam would have to pay an additional VND9.600 trillion (USD463.92 million) for electricity per year. The prices would likely be passed down to the consumers, by increases of between 0.02% and 9.03%, depending on the energy consumption of the product being manufactured.
Despite price increases of 6.8% in power production since March 2010, the Ministry of Finance had requested that the power and coal industries keep prices unchanged through last year to stabilise the domestic market.
