New plan for retail power pricing proposed

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A file photo of an EVN worker in Hanoi. Photo: Ngoc Thang 
The Ministry of Industry and Trade has revised the rules for adjusting power tariffs amid strident public criticism of state monopoly Electricity of Vietnam.
If the changes are approved, EVN can now increase the prices every three months by 3-5 percent at a time compared to the earlier 7-10 percent every six months.
But many economists and consumers are doubtful they will address the main complaint: that consumers have to pay more and more for electricity without having a say and or knowing why exactly EVN is hiking tariffs.
The new rules continue to allow EVN to hike tariffs when costs increase, without spelling out which ones.
The company, which has been citing losses for its frequent price hikes, is criticized for its lack of financial transparency.
Besides, while the changes are clear, albeit not clear enough, about when and how EVN is allowed to increase prices, they are very sketchy about price cuts, according to economists and consumers.
Nguyen Hoang Hai, vice chairman of the Vietnam Association for Financial Investors, told Tuoi Tre newspaper the government should have asked EVN to find ways to cut costs instead of relentlessly increasing prices to offset losses.
Bui Thi An, a Hanoi legislator, said consumers "have no choice" but to pay the increasing tariffs because EVN has a monopoly.
Tran Viet Ngai, chairman of the Vietnam Energy Association, said while the 3-5 rate recommended by the ministry is "reasonable," the three-month period between two hikes is too short.
While EVN should be allowed to increase prices when its costs rise, the government should also think about household consumers and other businesses whose operations would also be affected when power tariffs goes up, he pointed out.
He suggested that EVN's price hikes should be limited to once or twice a year.
EVN last raised its average tariffs by 7.5 percent to VND1,622 per kWh last March.

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