ANTD.VN - The 3% increase in electricity prices from May 4, 2023 is said to have been carefully calculated and will not have a big impact on the general price of goods, but will psychological factors cause a phenomenon of "following the flow"? Preventing the price of goods from increasing following the price of electricity is one of the things that must be done.
Electricity price increase is inevitable
According to economist Ngo Tri Long - former Director of the Institute for Price Market Research ( Ministry of Finance ), electricity prices have remained unchanged since 2019, but fuel prices (coal, gas), and electricity production costs have increased in recent times, causing Vietnam Electricity Group (EVN) to suffer consecutive losses. Therefore, increasing electricity prices at this time is reasonable. Mr. Ngo Tri Long also said that the 3% increase has been carefully considered by the Ministry of Industry and Trade. "With the current increase, to ensure compensation for production and business costs, electricity prices can increase by 10% compared to current levels. However, electricity is a sensitive commodity, affecting the entire economy and consumer life. The Ministry of Industry and Trade's 3% increase in electricity prices has been carefully calculated to avoid creating shocks and avoiding jerky policy management. A 3% increase in electricity prices will help EVN increase revenue and reduce difficulties even though it is still at a loss," said the expert.
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Meanwhile, speaking to the press, Dr. Le Dang Doanh - former Director of the Central Institute for Economic Management (CIEM) also said that the 3% increase in electricity prices is modest and cannot compensate for the recent increase in fuel prices. "However, increasing electricity prices will have a great impact on the economy , affecting producers and product prices," said Dr. Le Dang Doanh. On the positive side, increasing electricity prices will also make businesses and households save electricity. Along with that, it will encourage consumers to use renewable energy sources such as solar power, wind power, etc.
Regarding solutions to curb the situation of "following the flow" of commodity prices, Mr. Nguyen Tien Thoa - Chairman of the Vietnam Valuation Association said that the State must have a comprehensive policy on price stabilization. First of all, all enterprises that register prices and declare prices must report in detail the production and business costs of the enterprise when the electricity price increases by 3%, to avoid the situation where when electricity increases, enterprises also increase the cost of their products accordingly, or even higher. At the same time, there must be solutions to avoid taking advantage of the increase in electricity prices to attract goods in the market, traditional markets, affecting the goal of controlling inflation and stabilizing the macro economy...
Assessing the impact of electricity price increase on the consumer price index (CPI), Mr. Nguyen Xuan Nam - Deputy General Director of EVN said that according to the calculation of the General Statistics Office, if electricity price increases by 5%, the consumer price index (CPI) will increase by about 0.17%. Therefore, with a price increase of 3%, the impact on CPI is very small.
Customers will have to pay extra for electricity every month.
According to Decision 1062 of the Ministry of Industry and Trade, from May 4, 2023, the retail price of electricity will increase by an average of 3%. Accordingly, the retail price of electricity for daily life is still divided into 6 levels. Of which, level 1 from kWh 0 - 50kWh/month, the retail price is 1,728 VND/kWh; level 2 from kWh 50 - 100kWh/month, the retail price is 1,786 VND/kWh; level 3 from kWh 101 - 200kWh/month, the retail price is 2,074 VND/kWh; level 4 from kWh 201 - 300kWh/month, the retail price is 2,612 VND/kWh; level 5 from kWh 301 - 400kWh/month, the retail price is 2,919 VND/kWh. Level 6 is for households using 401kWh of electricity/month or more, retail price is 3,015 VND/kWh.
Mr. Vo Quang Lam - Deputy General Director of EVN said that for a household consuming 50kWh/month, the additional electricity bill each month is 2,500 VND/household. The whole country has about 3.33 million households, accounting for 11.98% of the total number of households using electricity for daily life at this level. Similarly, the additional electricity bill for a household consuming 100kWh/month is 5,100 VND/household, (the number of households using electricity from 51 - 100kWh in EVN in 2022 is 4.7 million households, accounting for 16.85% of the total number of households using electricity for daily life). Households consuming 200kWh/month will have to pay an additional 11,100 VND/household (the number of households using electricity from 101 - 200kWh in 2022 under EVN is 10.04 million households, accounting for 36.01% of the total number of households using electricity for daily life). This is the customer group with the largest proportion.
The additional electricity bill for a household consuming 300kWh/month is VND 18,700/household (the number of households using electricity from 201 - 300kWh in 2022 under EVN is 4.96 million households, accounting for 17.81% of the total number of households using electricity for daily life). The additional electricity bill for a household consuming 400kWh/month is VND 27,200/household (the number of households using electricity from 301 - 400kWh in 2022 under EVN is 2.21 million households, accounting for 7.95% of the total number of households using electricity for daily life).
For the manufacturing sector, electricity prices are divided by voltage level and low/peak and normal time frames. Accordingly, the highest electricity price during peak hours is 3,171 VND/kWh, normal hours is 1,738 VND/kWh and low hours is 1,133 VND/kWh. The administrative sector has a new electricity price of 1,690 - 1,940 VND/kWh depending on the time frame and voltage level. The retail price for the business sector has a fairly large difference between peak and low hours, respectively 4,724 VND/kWh and 1,402 VND/kWh. This price does not include VAT. After the price change, it is estimated that more than 1.82 million households using electricity for production will have to pay an additional 307,000 VND/month. Customers using electricity for business will pay an additional 141,000 VND/month; administrative and professional sectors will pay about 40,000 VND/month.
Calculate electricity savings, reduce production and business costs
As a direct electricity consumer, Mr. Tran Van Nam - Chairman of MBT Electrical Equipment Joint Stock Company said that the average electricity bill of enterprises is about 200 million VND/month. Although the recent increase in electricity price is lower than forecast and reasonable at this time, enterprises still have to recalculate production costs, replace old equipment, and avoid production during peak hours.
A representative of a business operating in the service sector said that to know the impact of the electricity price increase on business costs, it will take 1-2 months, when the electricity bill is available, for customers to know. However, electricity is an input fuel for all production and service industries, so the increase in electricity price will not exclude many industries from "following" to increase the price of goods and increase production costs. "Each item, each stage of production and distribution increases a little, but all are included in the product cost. Retailers must consider not to increase the price of goods too high, affecting purchasing power" - the representative shared.
From the perspective of a retail electricity buyer, Mr. Nguyen Ba Manh (Nam Tu Liem district, Hanoi) said: “Every family uses a lot of electricity in the summer. This method of calculating the progressive electricity price still makes each family's electricity bill higher than expected, especially when the weather is continuously hot, the family uses a lot of cooling equipment, children stay home from school all day... Not to mention the price of other goods increases with the electricity price. Therefore, saving electricity is still the top solution for every family."
Customers can track daily electricity index
In order for customers to proactively monitor and control the amount of electricity consumed that is likely to increase during the hot season, EVN requires power units to increase the provision of utilities to customers to monitor daily electricity indexes from remote electronic meter data. Accordingly, when closing meter indexes for each period, if the customer's electricity output recorded by the software system increases/decreases by 30% or more compared to the previous month, power employees will notify customers and conduct a re-check of the electricity index. EVN also directs power units to increase the provision of functions and utilities to customers from electronic meters that read data remotely. Specifically, data from electronic meters will be collected daily and posted on the customer service website/customer service application... Thereby, customers can proactively monitor daily electricity consumption indexes in a transparent and easy manner.
For electricity bill notifications and electricity bills, the electricity company will send information to customers via E-mail/Zalo/Customer Service Application so that customers can view information on electricity usage last month and the same period last year. Thereby, it can be seen that the cyclical nature of increased electricity consumption during the hot season. Electricity units also coordinate with competent authorities to check retail electricity prices for students and workers renting houses to live in accordance with the instructions in Directive No. 07/CT-BCT dated August 28, 2018 of the Minister of Industry and Trade on strengthening the inspection of the implementation of retail electricity prices for students and workers renting houses to live in.
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