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| According to the Ministry of Industry and Trade, with fluctuations in input parameters (mainly fuel prices), calculation results show that electricity prices need to be adjusted to increase at a high level to ensure financial balance and cash flow for EVN. |
At the regular Government press conference, Deputy Minister of Industry and Trade Do Thang Hai said that regarding the authority to adjust prices, the regulation that Vietnam Electricity Group (EVN) has the authority to adjust the average retail electricity price at a level below 5% (specifically from 3% to below 5%) has been in place since Decision No. 24/2017/QD-TTg of the Prime Minister . This regulation aims to ensure the level of autonomy of enterprises within the price framework approved by the Prime Minister.
Regarding the electricity price adjustment cycle, due to the impact of the world political situation, world fuel prices have increased since the end of the first quarter of 2022, the cost of fuel that Vietnam must import to produce electricity has also increased following world prices, causing EVN's electricity purchase cost to increase, affecting EVN's financial balance and cash flow. EVN has proposed to increase electricity prices in 2022 and 2023 to ensure cash flow to pay for electricity purchases from power plants, supporting the improvement of EVN's financial situation. With fluctuations in input parameters (mainly fuel prices), the calculation results show that electricity prices need to be adjusted to increase at a high level to ensure financial balance and cash flow for EVN.
During the process of reviewing EVN's proposal to adjust electricity prices in 2022 and 2023, the Government Standing Committee and the Prime Minister suggested that it is necessary to study and adjust electricity prices in a step-by-step manner to avoid sudden changes (based on the study of amending Decision No. 24/2017/QD-TTg), avoiding major impacts on the macro-economy, business production and people's lives. Implementing the direction of the Government Standing Committee and the Prime Minister, based on EVN's proposal, the Ministry of Industry and Trade has studied and drafted regulations to shorten the electricity price adjustment cycle to 3 months/time.
"This is also consistent with the provisions of Decision No. 24/2017/QD-TTg of the Prime Minister that EVN must report on the calculation of updated electricity prices every quarter," said the Deputy Minister of Industry and Trade.
However, because electricity price is an important and sensitive commodity, directly affecting production and business activities, people's lives and macroeconomic expenditures, the implementation of electricity price adjustment at the necessary level and time of adjustment must be reported and requested for direction from the Prime Minister to ensure macroeconomic management, political, economic and social stability.
Regarding the study on the construction of a two-component electricity price list to reduce cross-subsidy in electricity prices, Deputy Minister of Industry and Trade Do Thang Hai said that based on the analysis of proposals in the project to improve the structure of retail electricity prices and based on the analysis of the characteristics of the current socio-economic situation, the Ministry proposed to improve the structure of retail electricity prices in two phases.
Specifically, phase 1 revises the electricity price for customers using electricity for non-domestic purposes at a minimum level, ensuring to avoid causing too much fluctuation in the implementation of the retail electricity price structure but still solving urgent issues raised by public opinion and people in recent times.
In the second phase, in the coming years, the Ministry of Industry and Trade will continue to coordinate with EVN to monitor, update data, and assess the impact of the proposed plan in the Project (according to the principle of price reflecting full costs) on the production situation and people's lives, and develop a roadmap for application in each phase in accordance with the economic recovery to report to the Prime Minister for decision. This includes considering the pilot application of the proposed two-component electricity price according to capacity and electricity to apply to customers using electricity for production at 110 kV level or higher for a thorough assessment before official application.
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