Electricity tariffs were not adjusted up ahead of the Lunar New Year holiday (Tet) to avoid negative impact on local consumers and enterprises, but a new power price hike may come this month.

Deputy Minister of Industry and Trade Do Thang Hai (standing) speaks at a press conference held by the Government in Hanoi on March 2.

The Ministry of Industry and Trade will consider the power tariff increase proposal by Vietnam Electricity Group (EVN) and report to the Prime Minister if the spike is within the range of 7-10%, Deputy Minister Do Thang Hai said at the Government’s press conference in Hanoi City on March 2.

In case the rise is over 10%, he said, EVN will have to seek approval from the Ministry of Finance first before the trade ministry reports it to the Prime Minister.

Hai admitted there have been many inquiries that if the power price can be lowered following fuel price reductions.

“As electricity output from stations powered by diesel accounts for a mere 0.55% of the industry’s total, the world oil price plunge has left little impact on the power tariffs in the country,” Hai explained.

Meanwhile, there are many factors for the electricity tariffs such as coal whose price inched up 22% as of July 22 last year compared to August 1, 2013. Coal-fueled power plants produce 32.37% of the country’s total electricity output.

Gas prices also picked up four times between April 2014 and January 2015 and the average exchange rate has moved up while the water resource tax has increased from 2% to 4% and the price of electricity generated by under-30-MW plants has also risen.

“Such power price constituents are all seen rising,” Hai said.

Hai also compared the power tariffs in Vietnam, which have been revised up from 6.27 U.S. cents to 7.7 U.S. cents per kWh, with those in other ASEAN countries. For instance, the prices in the Philippines, Singapore, Thailand and Malaysia are 21.72 U.S. cents, 21.3 cents, 10.65 cents and 7.29 cents per kWh respectively.

Regarding the equitization of EVN, Hai said if the commercial electricity price is low, shares of the group will not be attractive to local and foreign investors.