Reasons for the increase in electricity prices to over 2,200 VND/kWh

(Dan Tri Newspaper) - An EVN representative stated that this electricity price increase was carefully considered based on fluctuations in input costs, including the price of coal and gas for electricity production, and the electricity costs paid by people and businesses.

According to an announcement from Vietnam Electricity Group, from May 10th, the average retail price of electricity will increase from VND 2,103.11 to VND 2,204.07/kWh (excluding value-added tax - VAT), equivalent to a 4.8% increase.

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

Electricity price adjustments are based on Government Decree 72 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 and adjusted every three months.

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

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

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

Electricity price list (Photo: Quynh Thuong).

The decision to adjust electricity prices was issued in the context of EVN still having accumulated losses from electricity production and business. 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 expected a pre-tax profit of more than 4,100 billion VND.

"By the end of 2024, EVN expects to achieve financial balance. This also marks a new beginning for the unit as it enters this year," Mr. An said.

Previously, in the first half of 2024, the group recorded a net loss of VND 8,098 billion, an improvement compared to the loss of VND 29,107 billion in the same period. According to the group's leaders, thanks to the electricity price increase in October 2024, EVN avoided losses last year. However, there are still accumulated losses from 2022 and 2023, amounting to more than VND 47,000 billion respectively.

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 10th.

Poor households will still receive financial support equivalent to 30 kWh, or 59,520 VND/month. Households eligible for social welfare programs with electricity consumption not exceeding 50 kWh/month will also receive equivalent support. This policy aims to reduce the burden of electricity costs for poor and disadvantaged households, helping to ensure social security.

Regarding the power source structure this year, EVN stated that low-cost hydropower only supplies about 25% of the total system output; the remaining 75% of the system's output is supplied from high-cost sources such as coal-fired, gas-fired, and oil-fired power plants, and renewable energy sources.

To generate additional electricity for the system, it is essential to rely on high-cost sources such as oil-fired thermal power plants, liquefied natural gas (LNG) turbine thermal power plants, and imported coal-fired thermal power plants. Furthermore, the unpredictable and high exchange rate of the US dollar has impacted the cost of electricity generation, which accounts for approximately 83% of the total electricity production cost.

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