The Vietnam Energy Association said next monthââ‚¬â„¢s electricity price hike of 6.8 percent approved by the government would not be enough to help ease the pressure of capital needs for the local power sector.
The association has instead urged the Communist Partyââ‚¬â„¢s Central Committee and Prime Minister Nguyen Tan Dung to allow a 10.7 percent increase on electricity retail prices, local news website VnExpress reported Thursday.
Even if power prices increase by 10.7 percent, families using less than 50 kilowatt-hours per month will only have to pay VND5,000 a month more than their current bills, according to the association.
The government has just approved an increase of 6.8 percent in retail power prices from March 1. The price hike is based on an expected increase of 28 percent in coal prices this year.
Tran Viet Ngai, chairman of the association, said both coal and power sectors are facing the pressure of raising sufficient capital for their projects.
Coal production costs would surge due to deeper mining operations while state-owned Electricity of Vietnam needs huge amounts of capital for 48 power projects from now to 2015, Ngai said.
Price increases would help both sectors maintain a healthy balance sheet and have funds for further investment, he said.
The Vietnam Energy Association said a 10.7 percent price increase would translate to VND7.75 trillion (US$408.8 million) increase in revenues for the power sector this year while the coal sector would earn an extra VND1.12 trillion ($59 million) with a 30 percent price hike.
Source: Thanh Nien