The proposal to increase electricity prices was made by the Ministry of Industry and Trade in the context of EVN's still very difficult financial situation. In 2023, the Group lost about 17,000 billion VND despite having adjusted electricity prices up twice in the year.
The total increase of 2 times (May and November) in the average retail electricity price in 2023 is 7.5%, up to VND 2,092.78/kWh.
In total, in 2022 - 2023, EVN will lose nearly VND 38,000 billion, not including the exchange rate difference still hanging over from previous years of about VND 14,000 billion. With this proposal, according to the Ministry of Industry and Trade, it aims to reflect fluctuations in input costs and help EVN have resources to pay investors of power plants.
Electricity prices may increase further this year
The mechanism for adjusting retail electricity prices is being applied according to 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. The most recent electricity price increase was in November 2023 with an increase of 4.5%.
At the 2023 year-end conference of 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. According to EVN, the main reason for the increase in electricity production costs is that input fuel prices (coal, oil, gas, etc.) are still much higher than in previous years. Meanwhile, the costs of purchasing electricity on the electricity market are still high, and payment costs are higher than the contracted electricity price.
Meanwhile, according to EVN leaders, the group's current electricity production cost is VND2,092.78/kWh, but the selling price is only VND1,950/kWh. The production cost that EVN has to buy electricity from its units as well as external sources is approximately VND1,620/kWh. The cost of purchasing electricity accounts for 80% of the cost, causing the company's accumulated losses to increase.
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