Electricity prices in Vietnam will not be raised any time soon despite higher input costs, a government official has said.

Nonetheless, it’s necessary to consider relating factors to keep the prices unchanged, Deputy Prime Minister Le Minh Khai said at a governmental meeting on prices management held on July 18.

A Vietnam Electricity (EVN) worker in hot weather. Photo: Hoa Viet Cuong, EVNHANOI

Electricity tariffs are facing upward pressure when input costs have skyrocketed since the beginning of the year. For example, the average price of anthracite supplied by Vietnam National Coal-Mineral Industries Holding Corp. (Vinacomin) increased by 63%. The price of imported coal doubled, to US$305 per ton while that of Brent crude oil hit $105 a barrel, nearly 2.5 times higher than before.

Keeping the power prices unchanged is part of efforts that the government has been making to curb inflation and stabilize the macroeconomics this year.

According to calculations by state sole power distributor Vietnam Electricity (EVN), the average retail price of electricity in 2022 has reached VND1,915 ($0.82) per kWh, 2.74% higher than the current average rate applied since 2019, which is VND1,844 ($0.79)/kWh.

In Vietnam, the average retail electricity tariff is adjusted when the input parameters (generation, transmission, distribution, operation) increase by 3% or more. In case the calculated selling price is 10% higher than the current rate, the Ministry of Industry and Trade (MoIT) and the Ministry of Finance shall check and report to the prime minister for a decision.

Earlier, EVN said it is not considering a power hike despite surging costs.

A few days ago, Prime Minister Pham Minh Chinh asked the country’s sole power distributor to ensure sufficient electricity for socio-economic development goals.

He required MoIT and the State Capital Investment Corporation (SCIC) to pay attention to EVN’s major projects for the national interest while asking MoIT to check power purchase agreements with Laos.

Regarding the construction of renewable energy projects, the PM asked MoIT to solve problems related to feed-in tariff (FIT) for new projects according to the market mechanism and fair competition, ensuring reasonable electricity purchase prices and encouraging the development of the power sector.