The Ministry of Industry and Trade (MOIT) has recently submitted a draft decree amending and supplementing Decree 72 dated March 28, 2025, on the mechanism and timing for adjusting average retail electricity prices.

The submission cites EVN’s report as showing that its accumulated losses of VND50,029 billion in 2022–2023, reduced to VND44,792 billion by the end of 2024.

EVN has proposed that the Minister of Industry and Trade report to the PM to allow this accumulated loss to be taken into account as a permissible cost when calculating the average retail electricity price. 

Other costs not fully included in electricity prices have also been proposed for allocation, including direct costs for electricity production and supply, which would be determined per audited annual financial reports from 2022 onward. Other costs also include unallocated exchange-rate differences and unpaid exchange-rate differences for power plants under purchase contracts.

EVN’s request has sparked mixed opinions.

VietNamNet recently interviewed Nguyen Tien Thoa about the issue:

Do you think the EVN’s proposal to include the VND44,792 billion accumulated loss in the average electricity price is appropriate?

I always keep a consistent viewpoint that the electricity pricing must adhere to the principle of covering all production costs, fully and accurately, including reasonable and valid expenses, plus necessary profits for reproduction, in compliance with legal regulations.

However, the issue arises when losses in production and business activities are caused by the enterprise’s own inefficiency or poor management, resulting in prices that cannot cover costs. In such cases, there is no discussion, and the enterprise must bear the consequences on its own.

In cases where, for socio-economic reasons, the State is compelled to keep electricity prices below costs and production expenses, resulting in negative cash flow (losses) and the enterprise being unable to preserve State capital, appropriate solutions must be implemented.

Addressing the cash flow deficit caused by pricing by gradually allocating it into electricity prices is not contrary to the principles of electricity price formation, does not conflict with the Law on Electricity, and does not violate Clause 7, Article 4 of the 2023 Law on Prices, which stipulates that 'Price-forming factors include the entire actual cost, profit (if any), or loss (if any), and financial obligations as prescribed by law.

What necessary steps are needed to audit and clarify the causes of EVN’s VND44,000 billion accumulated loss to ensure transparency, avoid waste and losses, and convince the public of the reasonableness of including this loss in electricity prices?

To achieve social consensus on this issue, the key is ensuring transparency and reasonableness. To do so, the Ministry of Industry and Trade must clarify legal provisions on rights and principles for regulating electricity prices for public understanding.

Additionally, provide clear explanations with truthful and accurate data: whether the loss stems from objective causes (state-set prices below fully and reasonably calculated costs) or from management weaknesses including unreasonable and invalid expenses in pricing.

Auditing must clarify and verify production and business results, financial reports, and check if accounting practices comply with regulations, immediately excluding any incorrect items, expenses, or revenues from audit results.

Furthermore, it is necessary to clarify which costs are included in prices, ensuring those included are reasonable, valid, and supported by invoices, receipts, and economic-technical norms.

Based on that, determine reasonable costs (after excluding unreasonable ones) compared to selling prices and publicly disclose them as required.

In the context of EVN’s proposal to include the loss in electricity prices, some suggest choosing between two scenarios: state budget compensation or allowing price increases. Which option has less negative impact on the economy and people?

Vietnam’s pricing mechanism for goods and services in general, and electricity in particular, operates on market principles, breaking away from subsidized pricing and state budget compensation for losses.

However, the state can implement support policies for investment, taxes, interest rates, etc., in specific cases to limit excessive electricity price increases that adversely affect livelihoods, production, business, and macroeconomic stability.

I have to once more emphasize that electricity pricing must follow the principle of fully and accurately including reasonable costs, combined with social welfare policies (beyond pricing), such as electricity subsidies for poor households.

Amending Decree 72 to fully include reasonable and valid costs in pricing to avoid cash imbalances is a fundamental step to balance EVN’s finances.

Meanwhile, EVN must implement cost optimization measures, modern management, and improve investment and cost management efficiency.

Nguyen Le