Vietnamese Prime Minister Nguyen Tan Dung has allowed power monopoly Electricity of Vietnam (EVN) to increase power prices by an average of between 7 to 10 percent without prior approval from the government.
The new increase will be applied as of January 10, 2014.
According to the new regulations approved by PM Dung last week, the EVN must wait six months between price hikes.
The new regulation stipulates that when changes in fuel prices and exchange rates make basic prices lower than the current prices, the EVN should reduce the latter correspondingly.
They can increase retail prices correspondingly when basic prices rise by 7-10 percent.
Price hikes can be made only after the stability fund is exhausted.
If the increase is more than 10 percent, the firm has to propose the new prices to the ministries of Industry and Trade and Finance.
The finance ministry will evaluate the proposed prices within 10 days, before sending its opinion to the trade ministry. The latter will have 10 more days to compile and submit the proposal to the prime minister for approval, the new regulations stipulate.
But many experts said last year, when favorable hydrological conditions helped the EVN earned profits of VND6 trillion (US$284.4 million), it did not reduce prices. Therefore, new regulations will make power prices more likely to rise than fall.
Since December 2011, electricity prices have increased four times by 5 percent each, including twice in each July and December of last year. The latest rise hike from VND1,437 to VND1,508 per kilowatt an hour took effect August 1.
In a statement one day earlier, the EVN said that the prices rose in order to offset the cost of input materials such as coal and gas.
PM Dung approved the range of retail power prices for the 2013-2015 period, capping the rate at VND1,835 per kilowatt an hour.
Like us on Facebook and scroll down to share your comment
Đăng ký: VietNam News
