Is the electricity price in Vietnam too low or too high?
VietNamNet Bridge - While Vietnamese believe that the Electricity of Vietnam (EVN), the only electricity retailer, sets high retail prices, international reports point out that the electricity price in Vietnam is lower than in other countries.


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The retail electricity price has increased by 6.08 percent




Southeast Asia Energy Outlook 2017 commented that the price in Vietnam is relatively low compared with other regional countries.

The report says the state is still indirectly subsidizing electricity production, so the electricity price doesn’t truly reflect production costs. 

Vietnam is pursuing a plan to gradually raise retail prices to help power generators, including EVN, cover expenses.

The report said the power sector in Vietnam has been doing well with an electricity access rate ranking third in South East Asia and a low proportion of population (2 percent) having no power.

Another report on Vietnam’s energy, the World Bank’s Electricity Tariffs, Power Outages and Firm Performance: A Comparative Analysis March 2017, also commented that the electricity price in Vietnam is among the lowest level in the region, even compared with the countries with low income per capita such as Cambodia, Indonesia, the Philippines, Laos and Myanmar.

The CEO of a large state-owned economic group said Vietnam’s power sector is at a high development level and could be in the top 3 developing countries. 

The reason behind the people’s protest against the electricity price increase is the lack of transparency in calculating the production costs.

He said EVN is taking losses only because it cannot sell electricity at market prices. It has to sell at low price levels to help reduce input costs in the economy.

Nevertheless, assessments by CEOs and international organizations are not what Vietnamese believe. EVN faces strong opposition from the public when it attempts to raise retail prices.

Most recently, EVN announced an electricity retail price increase by 6.08 percent to VND1,720 per kwh, commencing from December 1.

The reason behind the people’s protest against the electricity price increase is the lack of transparency in calculating the production costs.

The Ministry of Industry and Trade (MOIT), explaining the decision to raise the retail price, said the production cost had increased, and EVN is incurring an accumulative loss of VND9.8 trillion because of  exchange rate fluctuations.

However, the public still finds the price increase unconvincing because they cannot check the figures.

They have no way to check the input costs of electricity production such as power generation, power transmission, distribution & retailing, management costs and support services. Meanwhile, the retail price is defined based on costs.

EVN was allowed by the government to raise the electricity price by 3-5 percent without having to ask for permission in 2017. It only has to get government approval for adjustments of over 5 percent.


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