Electricity price hike

The Vietnam Electricity Group (EVN) has announced to increase the electricity prices by 3% to over VND1,920 per kWh from May 4, after they had been kept unchanged for four years.

According to a decision signed by the CEO of the Vietnam Electricity Group (EVN), the average selling price of electricity will increase from VND1,864.44 to VND1,920.37 per kWh, excluding VAT.

As electricity is among the group of items that is used to calculate the consumer price index, the Ministry of Industry and Trade, which has approved the decision, has emphasized that the price hike plan had been carefully assessed.

Data released by the Ministry of Industry and Trade in late March showed that the production cost of electricity was VND2,032.26 per kWh in 2022, up 9.27% compared to 2021. With a current average retail price of VND1,864.44 per kWh, EVN lost nearly VND168 per kWh.

Due to the increasing input costs, EVN incurred losses of over VND36.2 trillion from electricity production in 2022. With financial incomes taken into account, EVN’s losses last year dropped to around VND26.2 trillion.

If electricity prices are not increased this year, EVN will likely suffer estimated losses of around VND64 trillion, due to the strong rise of the U.S. dollar against the Vietnamese dong, higher input fuel prices for thermal and gas power and the high price of renewable energy purchase.

EVN has estimated that the 3% price hike will generate an additional VND8 trillion over the next eight months, helping relieve the financial difficulties for the group. The price hike will push up the consumer price index (CPI) this year by 0.17%.