VietNamNet Bridge – Businesses have been warned that the electricity price would be raised one or two times at least in 2013.

From April 20, 2013, the price of coal to be sold to power plants would be equal to 100 percent of the 2011’s coal production cost and to 84 percent of the 2013’s cost.

Deputy General Director of the Electricity of Vietnam (EVN) -- Dinh Quang Tri, said EVN still has not figured out in details the electricity price adjustments following the coal price increase.

Tri said the electricity price not only depends on the coal price, but also on many other factors, including the input fuel prices, the electricity output structure and the dong/dollar exchange rate.

“We would reconsider the pricing and we would make proposals on the electricity price adjustments to the Ministry of Industry and Trade, if necessary. But to date, no price adjustment has been made,” Tri said.

Dang Huy Cuong from the Ministry of Industry and Trade has confirmed that the ministry is still awaiting the report from EVN on the electricity production costs after the coal price increases, and that any decision on the electricity price adjustments would be made only after considering the situation.

Meanwhile, experts said the statements by EVN and the Ministry of Industry and Trade just aim to reassure the public and prepare people for the new electricity prices.

Businesses think that the electricity price increase is inevitable, sooner or later. Therefore, they have been living in the fear for the price increase one day.

People also have whispered in each others’ ears that EVN has the golden opportunity to raise the electricity price now, when the consumer price index (CPI) increases slowly. If it raises the price now, it would be able to avoid the violent criticism from the public which occurred any times, when the price increases were announced.

The pay for coal accounts for 70 percent of the production cost of the thermopower plants. Meanwhile, EVN uses approximately 100 million kwh per day from coal run power plants. It is estimated that ¼ of the electricity output comes from coal run power plants. Therefore, the coal price increase will certainly influence the electricity price.

EVN now has bigger power to adjust the electricity price. Dr. Nguyen Minh Phong, a well-known economist, said under the current laws, when the input costs increase by five percent, EVN will have the right to adjust the electricity price.

If Vietnam uses more electricity from coal-run or oil-run plants, the factors, together with the coal price increase, would make the total input costs increase by over 5 percent, and EVN would have the right to raise the electricity price.

The director of a steel mill in the north said steel manufacturers are now at the point of death after the FO price increased by VND807 per kilo. If the electricity price also increases, they would be pushed against the wall.

The director said the electricity bill accounts for 6 percent of the cost of ingot steel production and 1 percent of the production of other steel products.

Cement manufacturers have also been worried stiff about the possible electricity price increase. The manufacturers now have to pay VND2.300 per kwh, and they need 100 kwh to make one ton of cement, worth VND230,000. If the electricity price increases by five percent, one ton of cement would be VND13,-15,000 more expensive.

Nam Phong