Vietnam to hike power price by up to 10%

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Vietnam-power-linesVietnam’s Prime Minister Nguyen Tan Dung has allowed the power monopoly Electricity of Vietnam (EVN) to increase tariffs by 7-10 per cent without prior approval. The change in regulation will take effect on January 10, 2014, Thanh Nien reported.

According to the new regulations, EVN must wait six months between price hikes. The new regulation stipulates that when changes in fuel prices and exchange rates make basic prices lower than the current prices, the EVN should reduce the latter correspondingly. They can increase retail prices correspondingly when basic prices rise by 7-10 percent. Price hikes can be made only after the stability fund is exhausted.

If the increase is more than 10 per cent, the firm has to propose the new prices to the ministries of Industry and Trade and Finance. The finance ministry will evaluate the proposed prices within 10 days, before sending its opinion to the trade ministry. The latter will have 10 more days to compile and submit the proposal to the prime minister for approval, the new regulations stipulate.

But many experts said last year, when favourable hydrological conditions helped the EVN earn profits of $285 million, it did not reduce prices. Therefore, new regulations will make power prices more likely to rise than fall.

Since December 2011, electricity prices have increased four times by 5 per cent each, including twice in each July and December of 2012. The latest rise hike took effect August 1. 2012. In a statement, EVN said that the prices rose in order to offset the cost of input materials such as coal and gas.

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Reading Time: 1 minute

Vietnam’s Prime Minister Nguyen Tan Dung has allowed the power monopoly Electricity of Vietnam (EVN) to increase tariffs by 7-10 per cent without prior approval. The change in regulation will take effect on January 10, 2014, Thanh Nien reported.

Reading Time: 1 minute

Vietnam-power-linesVietnam’s Prime Minister Nguyen Tan Dung has allowed the power monopoly Electricity of Vietnam (EVN) to increase tariffs by 7-10 per cent without prior approval. The change in regulation will take effect on January 10, 2014, Thanh Nien reported.

According to the new regulations, EVN must wait six months between price hikes. The new regulation stipulates that when changes in fuel prices and exchange rates make basic prices lower than the current prices, the EVN should reduce the latter correspondingly. They can increase retail prices correspondingly when basic prices rise by 7-10 percent. Price hikes can be made only after the stability fund is exhausted.

If the increase is more than 10 per cent, the firm has to propose the new prices to the ministries of Industry and Trade and Finance. The finance ministry will evaluate the proposed prices within 10 days, before sending its opinion to the trade ministry. The latter will have 10 more days to compile and submit the proposal to the prime minister for approval, the new regulations stipulate.

But many experts said last year, when favourable hydrological conditions helped the EVN earn profits of $285 million, it did not reduce prices. Therefore, new regulations will make power prices more likely to rise than fall.

Since December 2011, electricity prices have increased four times by 5 per cent each, including twice in each July and December of 2012. The latest rise hike took effect August 1. 2012. In a statement, EVN said that the prices rose in order to offset the cost of input materials such as coal and gas.

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