In its statement released to the media yesterday, EVN said for the time being it had not made any plan for increasing power prices.
Under Decision 24 by the Prime Minister on regulating power prices and Circular 31 by the Industry and Trade Ministry on the implementation of the Decision, power prices can be adjusted when power production cost increases sharply (5 per cent or more) due to changes in input costs.
EVN said any adjustment to power prices will be reported to the Government for approval and publicly carried out under the control and supervision of relevant agencies.
Electricity rates will be adjusted to reflect the actual conditions of the economy but kept in sync with the country’s policy on restricting inflation, stabilizing macro-economy and maintaining social security.
Electricity is a special kind of commodity, the retail price of which is subject to close regulation and monitoring by the Government, EVN said.
EVN raised electricity prices by 5 per cent last December, the second increase in 2011. The average power tariff is currently VND1,304 ($0.06) per kWh.
Under current regulations, if input cost factors change and cause electricity production cost to increase by 5 percent or higher, EVN is allowed to tap into the power price stabilization fund, which was set up last year, to offset the increased input cost to stabilize the power prices. If the production costs continue to increase after the fund is used as a price subsidy, EVN is allowed to propose the Industry and Trade to raise power prices by 5 per cent.
If, after 5 days of receipt of the proposal, the ministry has not given any feedback about it, EVN has the right to raise power prices by the specified rate.
In a related development, Deputy Prime Minister Hoang Trung Hai has assigned the Finance Ministry to work with relevant agencies to regulate an operational mechanism for the power price stabilization fund.
Accordingly, power prices must be reviewed monthly to identify changes in input factors and EVN must complete its calculation of those changes before the 20th day of every month.