Providing information at a press conference this afternoon, November 9th, Mr. Nguyen Dinh Phuoc, Chief Accountant of Vietnam Electricity Group (EVN), stated that the electricity price adjustment is being implemented in accordance with Decision 24 of the Prime Minister .
Regarding the reasons for the electricity price increase, Mr. Phuoc explained that this year several input factors have affected EVN's costs. Specifically, hydropower production decreased by nearly 17 billion kWh due to drought and the prolonged El Nino phenomenon. Fuel prices also remained very high.
Specifically, coal prices in 2023 increased by 29-46% compared to 2021 levels. Oil prices also increased by approximately 18% compared to 2021. Notably, foreign exchange rates have risen sharply by nearly 4% to date, impacting EVN's input costs.
The 4.5% increase in electricity prices, effective from November 9th, will generate over 3,200 billion VND in additional revenue for EVN from now until the end of the year.
“ The corporation has reported to relevant ministries and agencies, assessed the impact of the consumer price index (CPI), and sought the Government's opinion on adjusting electricity prices. A 4.5% increase in electricity prices will help EVN increase its revenue by approximately 3,200 billion VND from now until the end of the year.”
"This amount helps the corporation alleviate difficulties caused by rising input costs. The current retail price of electricity is still lower than the cost of production. However, to ensure social welfare, the corporation has proposed an increase in electricity prices that is lower than the actual increase in costs," Mr. Phuoc said.
According to EVN representatives, in the current cost structure, electricity purchase costs account for 83% of the electricity industry's total cost. The remaining nearly 17% is the cost of transmission and distribution. To mitigate the impact of price increases, the corporation has also requested its units to thoroughly reduce and cut costs.
According to Mr. Nguyen Quoc Dung, Head of EVN's Business Department, the electricity price increase will affect the poor and those eligible for social welfare programs. However, according to current regulations, these groups will receive a subsidy for the first 30 kWh. For households with the highest electricity consumption, exceeding 401 kWh, the increase will only be 55,600 VND per month.
Regarding the issue of keeping electricity prices lower than the cost, which does not accurately and fully account for costs and affects the operations of businesses, an EVN representative stated that the Group has submitted a report to the Government and the Ministry of Industry and Trade .
Also answering questions from the press at the press conference, Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority (Ministry of Industry and Trade), said that this electricity price adjustment does not yet include the exchange rate differences of over 14,000 billion VND from previous years. All of these exchange rate differences are still pending because including them in the electricity price would cause a very sharp increase.
"The increase in electricity prices will affect manufacturing industries and input material prices. It is estimated that the increase in electricity prices will raise the CPI by 0.035%," Mr. Hoa said.
From today, November 9th, EVN has decided to adjust the average retail electricity price, accordingly, the average retail electricity price is 2006.79 VND/kWh (excluding value-added tax).
According to EVN's assessment, electricity production and business costs in 2021 and 2022 show that the cost of electricity production and business in 2022 was 2,032.26 VND/kWh, an increase of 9.27% compared to 2021.
According to calculations, electricity production costs in 2023 will remain high, and the price of electricity in 2023 will continue to be higher than in 2022. The estimated cost of electricity production and business in 2023 is approximately 2,098 VND/kWh.
For business and service customers (547,000 customers), after the price change, the average monthly electricity bill will increase by 230,000 VND/month. For manufacturing customers (1,909,000 customers), the average monthly electricity bill will increase by 432,000 VND/month. For administrative and public service customers (681,000 customers), the average monthly electricity bill will increase by 90,000 VND/month.
PHAM DUY
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