Reasons for electricity price increase to more than 2,200 VND/kWh

According to an announcement from Vietnam Electricity Group, from May 10, the average retail price of electricity will increase from VND2,103.11 to VND2,204.07/kWh (excluding value added tax - VAT), equivalent to an increase of 4.8%.

Most recently, electricity prices were adjusted on October 11, 2024, with an increase of 4.8%.

The adjustment of electricity prices is based on Decree 72 of the Government on the mechanism for adjusting average retail electricity prices issued in March. Accordingly, when input costs increase by 2% or more, electricity prices will be reviewed for change every 3 months.

Sharing about the decision to increase electricity prices at a press conference on the afternoon of May 9, Mr. Vo Quang Lam, Deputy General Director of EVN Group, said that this increase has been carefully considered by the enterprise based on fluctuations in input costs (coal and gas prices for electricity production) and electricity costs that people and businesses must pay.

In the first four months of the year, the cost of imported coal, gas and oil continued to increase. "The adjustment of electricity prices from May 10 was carefully considered by EVN to balance the needs, especially ensuring the competitiveness of the economy and social security," said Mr. Lam.

He said that after careful calculation and assessment of the impact on CPI and the economy, EVN proposed and issued a decision to increase electricity prices by 4.8%.

Electricity price list (Photo: Quynh Thuong).

The decision to adjust electricity prices was issued in the context that EVN still has accumulated losses from electricity production and trading. At the annual review conference of the State Capital Management Committee held in December 2024, Mr. Dang Hoang An, Chairman of the Board of Directors of EVN, said that the company expects to have a pre-tax profit of more than VND 4,100 billion.

"By the end of 2024, EVN is expected to balance its finances. This is also a new beginning for the unit entering this year," said Mr. An.

Previously, in the first half of 2024, the group recorded a loss after tax of VND8,098 billion, an improvement compared to the same period last year's loss of VND29,107 billion. According to the group's leaders, thanks to the increase in electricity prices in October 2024, EVN escaped the loss last year. However, there are still accumulated losses from 2022 and 2023, equivalent to more than VND47,000 billion.

According to EVN's calculations, each household will have to pay an additional 4,350-62,150 VND/month when electricity prices increase by 4.8% from May 10.

Poor households are still supported with cash equivalent to 30 kWh, equivalent to 59,520 VND/month. Policy households with electricity consumption of no more than 50 kWh/month are also supported with equivalent amounts. This policy aims to reduce the burden of electricity costs for poor households and policy households, helping to ensure social security.

Regarding the structure of power sources this year, EVN said that low-cost hydropower sources can only supply about 25% of the total system output; the remaining 75% of the system output is provided by high-cost power sources such as coal, gas, oil, renewable energy, etc.

For the system's additional power output, it is basically necessary to mobilize from high-cost power sources such as: Oil-fired thermal power sources, LNG turbine thermal power sources and imported coal-fired thermal power sources. In addition, in recent times, the foreign exchange rate (USD) has been unpredictable and increasing. This affects the cost of power generation, which accounts for about 83% of the cost of electricity production.

Source: https://dantri.com.vn/kinh-doanh/ly-do-gia-dien-tang-len-hon-2200-dongkwh-20250509174107621.htm