Businesses moaning about electricity price increases

VietNamNet Bridge – Vietnamese enterprises are staggering, but the Electricity of Vietnam is following up with another blow: the electricity price would be raised by 7 percent in the time to come.

Vietnam, electricity outage, MOIT, electricity price, CPI, tax

EVN keeps rising electricity, businesses keep complaining

Le Ba Lich, Chair of the Vietnam Livestock Feed Association, said the enterprises in the industry are “half dead”. A lot of small and medium enterprises have got bankrupt because of the high input material prices. And they would be dealt another blow when the electricity price increases from July 1.

A senior executive of the Cuu Long Seafood Import-Export Company said seafood companies would be the biggest sufferer from the electricity price increase, because the companies consume much electricity for keeping seafood products frozen.

An official of the Vietnam Association of Seafood Exporters and Producers (VASEP) has confirmed that seafood companies have been meeting big difficulties since 2012. If the input costs continue increasing, many of them would go bankrupt.

Steel manufacturers have been screaming more loudly than other enterprises, because they have to bear the higher electricity prices. Pham Chi Cuong, Chair of the Vietnam Steel Association, has heavily criticized the EVN’s policy on discriminatory treatment.

According to Cuong, the ingot steel manufacturers are the biggest electricity consumers, about 6 percent of the production costs. Meanwhile, the other manufacturers only consume 120 kwh for every ton of products, or 1 percent of the production costs.

He has warned that once steel manufacturers have to bear higher electricity prices, their products would be more expensive, which would badly affect the other industries and the whole national economy.

It is most visible that once building material manufacturers suffer the high electricity price, they would be pushed against the wall. If so, thousands of workers in the enterprises would become redundant, which would be a heavy burden on the society.

A senior executive of Visan said Vietnamese enterprises would get exhausted if the power price rises by 2-7 percent. The enterprise which has to pay VND1.5 billion a month for the electricity bill, would have to pay VND90 million more a month, if the electricity price increases by 5 percent.

“How can enterprises arrange money to pay for the electricity bills, if their products have been left unsold?” he questioned.

Bank loan interest rates down, but electricity price up

Le Dang Doanh, a well-known economist, said he cannot understand why the Ministry of Industry and Trade insists on the power price increase at this moment, when big difficulties are encircling enterprises from all sides.

In an effort to rescue businesses, the government has decided to reduce tax and delay tax payment to ease the burden on the businesses. Meanwhile, the move of raising the electricity price would push the business to the death.

Pham Chi Lan, also a well-known economist, has called on government agencies to reconsider the electricity price adjustment roadmap, saying that EVN and the industry ministry should choose the reasonable time for the price increase.

The 5-7 percent electricity price increase is believed to have the impacts on the CPI by less than 1 percent. However, 1 percent, in such circumstances, would be enough to cause shocks to the national economy.

Tran Thuy

Vietnam, electricity outage, MOIT, electricity price, CPI, tax