Official says no plan for power price hike just yet

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The government has not made a decision on when to raise power prices as the timing of such a hike needs to be carefully weighed against the goal of controlling inflation, an official said.

It's necessary to take into consideration the interest of both businesses and consumers and the need to rein in inflation, Deputy Prime Minister Vu Van Ninh was quoted by Lao Dong newspaper as saying Thurday.

His statement came after state-owned utility Electricity of Vietnam, also known as EVN, submitted a proposal to the Ministry of Industry and Trade, asking for an increase in power prices by between 10 and 13 percent.

After the latest hike in March, the average retail price stands at VND1,242, or around 6 cents, per kilowatt-hour. EVN can only break even when the price is raised to VND1,350 per kilowatt-hour, it said.

A source told Thanh Nien the Ministry of Industry and Trade is considering an increase of 11 percent.

An EVN official said the price hike is expected to be approved in November, but another official rejected this, saying the government is still focused on fighting inflation.

Economist Le Dang Doanh told Thanh Nien that businesses and consumers alike were facing many difficulties as inflation was still high. The power sector has the right to ask for a price increase, but it should not be this year, he said.

Doanh also said EVN has invested funds outside its main business scope, so it's necessary to account for all the losses it may be incurring from such secondary business activities.

Deputy PM Ninh said Thursday that the government will not allow EVN to hike prices for the sake of offsetting such losses.

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