Electricity prices would increase today by 5 per cent to VND1,304 (US$0.06) excluding VAT for one kWh, Electricity of Viet Nam said in a press release.

The existing average price of VND1,242 would rise VND62 following decision 380/BCT-DTDL issued by the Ministry of Industry and Trade (MoIT) last Friday.

The increase would not apply to the first rates on the price escalation chart, which starts from 0-50kWh for the poor – who normally use less than 50kWh of electricity per month – and from 0-100kWh for other people.

As a result, the increase would be calculated from the 101st kWh of electricity.

Poor families, who were required to register and prove they do not use not more than 50kWh of electricity a month, would still receive VND30,000 (US$1.40) as support from EVN.

Previously, EVN submitted a report to MoIT to ask permission to increase the price on December 13.

According to EVN's report, the group suffered a loss of VND10.162 trillion ($500 million) in electricity business due to low hydro-power plant production in 2010 because of insufficient water supply.

EVN had to utilise its oil-fired plants and purchase additional electricity at high prices, which caused operating costs to soar. Increased fuel prices and exchange rates contributed to rising expenses.

In a previous interview with the Viet Nam News, deputy general director of EVN Dinh Quang Tri said national electricity retail prices had subsequently remained inadequate.

"Increasing the electricity price is a urgent need for long-term development, which is in accordance with a socialist-oriented market economy as well as the formation and development of electricity market in Viet Nam," Tri said.

"It will also help solve all existing problems in the electricity price."

VNS