Vietnam plans 20 pct hike in electricity prices

The Associated Press
Wednesday, October 1, 2008

HANOI, Vietnam: Vietnam, desperate for new power plants, will likely raise retail electricity prices by 20 percent next year to attract more investment in the energy sector, a state news report said Wednesday.

The online newspaper VnExpress quoted Vice Minister of Trade and Industry Bui Xuan Khu as saying Vietnam would begin raising its government-controlled electricity prices next year.

“Recently, we have maintained low retail prices with the goal of containing inflation,” Khu was quoted as saying. “The price will rise starting in 2009.”

Electricity prices in Vietnam are much lower than those elsewhere in the region, making the country less attractive to potential energy investors, Khu said.

The pricing plan will be submitted soon to Prime Minister Nguyen Tan Dung for final approval, the report said.

Vietnam’s demand for power is expected to grow by 16 percent a year until 2015, according to government projections, and the country’s booming economy has made it difficult to keep pace with demand.

The price hike will target households while electricity costs for manufacturers will remain unchanged or will be increased slightly, Khu said.

Vietnam charges households 862 dong (5 U.S. cents) per kilowatt hour, while manufacturers pay 900 dong (5.5 cents).

Thailand, Singapore, Indonesia and Malaysia charge from 14 cents to 15 cents, said Chu Van Tien, an official at Electricity of Vietnam, the country’s power company.

In neighboring China, the top price is 7.5 cents per kilowatt hour.

The prime minister has assigned the Ministry of Trade and Industry to work with EVN to work out a suitable pricing mechanism that will attract investment, Tien said.

http://www.iht.com/articles/ap/2008/10/01/business/AS-Vietnam-Electricity-Price.php

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