The proposal to increase electricity prices was made by the Ministry of Industry and Trade in the context of EVN's difficult financial situation, with a loss of about VND17,000 billion last year.
At the Price Steering Committee meeting earlier this week, the Ministry of Industry and Trade proposed adjusting electricity prices this year.
Last year, the average retail electricity price increased by 7.5% to VND2,092.78 per kWh, after being adjusted by authorities twice in May and November.
The mechanism for adjusting retail electricity prices is currently following Decision 24/2017, in which the time between two adjustments is 6 months if input costs are reviewed and checked, causing prices to increase by 3% or more. Most recently, electricity prices increased by 4.5% in November 2023.
With the proposal of the Ministry of Industry and Trade, if approved by competent authorities, the next price increase may be in May this year.
The Ministry of Industry and Trade proposed to continue increasing electricity prices in 2024. (Illustration photo).
The reason for the Ministry of Industry and Trade's proposal to increase electricity prices this time is due to fluctuations in input costs and to help Vietnam Electricity Group (EVN) have resources to pay investors of power plants.
EVN said that despite efforts to reduce costs, retail electricity prices have been adjusted twice but still cannot compensate for the increased cost of purchasing electricity. Therefore, in 2023, EVN will not be able to balance production and business results.
With the average retail electricity price increase of 4.5% on November 9 to VND2,006.79/kWh (previously increased by 3% on May 4), EVN said that this increase only helped increase revenue by about VND3,200 billion, not enough to cover the group's production and business costs. Exchange rate differences of more than VND14,000 billion from previous years were also not calculated in the electricity price.
After two electricity price increases in 2023, EVN still recorded an estimated loss of VND 17,000 billion, of which the parent company alone lost VND 24,595 billion in 2023. In total, in 2022 - 2023, the group lost nearly VND 38,000 billion, not including the exchange rate difference still hanging from previous years (about VND 14,000 billion).
EVN explained that many input parameters affect costs. In addition, input fuel prices, although lower than last year, are still higher than before.
Speaking at the recent 2023 year-end conference of Vietnam Electricity Group (EVN), Mr. Dang Hoang An, Chairman of EVN, said that if the financial situation does not improve soon, the lives of workers will be affected, and many low-paid officials will leave the industry.
Mr. Nguyen Hoang Anh, Chairman of the State Capital Management Committee at Enterprises, also stated that if electricity prices are not increased, it will be impossible to resolve EVN's accumulated losses.
According to PHAM DUY/ VTC News
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