HANOI: The Electricity of Vietnam (EVN) has once again proposed to increase electricity prices to combat enormous losses, which may reach more than 93 trillion dong (nearly US$4bil or RM17.6bil) in 2022 and 2023.
In a recent report submitted to the Industry and Trade Ministry and the Committee for Management of State Capital at Enterprises, EVN delivered a bleak picture of its financial balance in 2022 due to high fuel prices and volatile foreign exchange rates.
Despite efforts to save costs by optimising cash flow, mobilising hydroelectric power and reducing high-cost thermal power sources, EVN still recorded a total loss of nearly 29 trillion dong (RM5.4bil) in 2022.
Based on the anticipated output of 251.3 billion kWh in 2023, Vietnam’s largest electricity producer foresees a bigger loss of up to over 64 trillion dong (RM12bil) this year if the electricity prices are not adjusted.
The average retail price of electricity in 2023 will still stay at 1,864 dong (35 sen) per kWh, which has not been revised since 2019.
A representative of EVN told Lao Dong (Labour) newspaper that for each kWh of electricity sold, EVN would bear a loss of 197 dong (3.7 sen).
Only hydroelectricity sources will bring profits, but hydroelectricity only accounts for 33% of the output in 2023.
Meanwhile, coal-fired power, gas turbine, oil-fired power and renewable energy, which comprise 67% of the output, have a higher cost than the current retail price.
Therefore, the group said if the electricity prices are not adjusted upward, the accumulated loss of over 93 trillion dong (RM17.6bil) in two years will result in 44.8% of state capital at EVN.
Data from Tien Phong (Pioneer) newspaper revealed EVN incurred a loss of 11.2 trillion dong (RM2.1bil) in the first two months of this year.
According to EVN’s leaders, while coal and gas prices have been implemented in line with the market mechanism, the retail price of electricity has not been adjusted in time to the fluctuations of input, which is causing significant financial pressure on EVN.
Late in 2022, EVN proposed to the Industry and Trade Minister to consider adjusting the retail price of electricity but was turned down due to inflationary pressure.
In a meeting with EVN in February, Industry and Trade Minister Nguyen Hong Dien said any adjustment of electricity prices would need to be thoroughly assessed due to its significant impact on inflation, people’s lives and the government’s macroeconomic management.
The latest data from the General Statistics Office showed the consumer price index rose 4.18% in the first quarter. Rising electricity costs would impact many industries and challenge the government’s effort to maintain inflation at a comfort zone.
At a recent meeting of the Steering Committee on Price Management, Deputy Minister of Industry Do Thang Hai said electricity prices would inevitably be adjusted in the coming period, requiring the calculation of other commodity prices to make the appropriate modification. — Viet Nam News/ANN
