Workers maintain an electric grid in Hanoi. Vietnam raised average electricity prices by five percent from August 1, the second increase in more than seven months. PHOTO: REUTERS
State-owned Electricity of Vietnam (EVN) increased electricity prices by an average of five percent as of August 1, the fifth hike since 2011.
Average power prices were raised to 1,508.85 dong (7.1 cents) per kilowatt-hour from 1,437 dong currently, according to an EVN statement. Prices were last raised in December, also by five percent.
EVN said in a statement that the hike was necessary in order to cover increasing input costs, including coal and gas.
Coal prices have gone up 37-41 percent since April, it said.
Last year, EVN revenues totaled VND143 trillion, turning a VND5 trillion profit.
Experts said EVN will earn a few more trillion dong this year thanks to the latest price increase.
An EVN official, who wanted to remain anonymous, told Tuoi Tre that even with the latest increase, it would not be able to cover losses incurred over the past several years, which exceed VND20 trillion.
Ngo Tri Long, former deputy director of the Market and Price Research Institute, said it is likely that relevant agencies approved the price hike based on the rate of inflation over the first seven months of this year over two percent.
Residents, of course, are unhappy with the increase, especially considering current economic difficulties, he said.
"But they have no choice because EVN is monopoly," he said.
He said EVN should do a better job providing the public with details on its input costs and the efforts it has made to cut down on wasteful spending.
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