VINACHEM

Head of the Ministry of Finance's Price Management Department Nguyen Tien Thoa, said EVN had three proposals on the table of price rises between 5 and 10 per cent.

Thoa said electricity production input costs had risen by 3.3 per cent, since the last price rise in December last year.

He said factors influencing the price rise included an exchange rate rise of 0.6 per cent, gas fuel price rises of 10.4 per cent, and a 40 per cent rise for FO oil, while coal prices decreased by 0.3 per cent.

EVN's production costs went up by more than VND15 trillion (US$714.2 million) due to exchange rate differences and other rising costs, he said, adding that the ministries of Industries and Trade (MoIT) and Finance (MoF) would review the proposal in the upcoming time.

A representative from the MoIT's Electricity Regulatory Authority of Viet Nam said the electricity price hike would be calculated by the two ministries with the target of making the price in line with the market economy while ensuring efforts to further curb inflation.

According to Government Decision No 24 on electricity management, EVN can raise power prices by a maximum of 5 per cent, if input costs rise by up to 5 per cent. With the 3.3 per cent increase in input costs, the electricity price hike would be possible.

Nguyen Minh Phong, head of the Ha Noi Institute for Socio-economic Development's Economic Research Division, said an electricity price adjustment would be normal in the context of the market.

However, Phong said the electricity price hike in the context of an economic downturn which put some businesses into bankruptcy.

He said calculations on petroleum and electricity prices had not been clear, resulting in an increase instead of a decrease. — VNS