Vietnam to substantially increase power prices in 2013

Retail power prices in Vietnam will by 10 to 15.6 percent this year.

Vietnam's Finance Minister Vuong Dinh Hue noted that the retail price hike in 2012 must be calculated based on total production costs, adding one-fourth of the Electricity Group of Vietnam’s loss in 2010, which was VND8.04 trillion or USD384.7 million. A third of this loss due to exchange rate fluctuations in 2010. Another large part he attributed to taking over substandard rural electricity grids from local authorities.

“The price of electricity will be calculated using the factors I've mentioned. The increase is expected to be more than 10%, but less than 15.6%," Hue added.

The Government is now considering whether the price of electricity should be changed one time for the entire year, or if it should be adjusted every quarter.

Hue assured that the social and business impacts of any price change will be taken into account.

The minister said the power sector will be unable to attract domestic and foreign investment if retail prices are not set at appropriate levels.

Such price adjustments are unavoidable, said Hue, adding that the state cannot subsidize the power sector forever.

For the source of this story, click here.

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