Power prices may go up 5-10 percent: gov't official

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State utility Electricity of Vietnam is considering a plan to raise power prices by up to 10 percent due to increased input costs, a government official said.

The cost of power production has risen 3.29 percent this year, or VND42.85 per kilowatt-hour, said Nguyen Tien Thoa, head of the Finance Ministry's Price Control Department.

A price hike between 5 and 10 percent is also necessary to help the utility, known as EVN, offset its losses, he said. 

EVN first announced a plan to seek government permission to raise power prices in March, saying higher input costs were placing a burden on the company. It reported an estimated loss of VND3.5 trillion in 2011 (US$166.4 million).

Power prices are still subsidized by the government. The most recent hike was last December, when the average power tariff was increased by 5 percent to VND1,304 per kWh.

The government plans to restructure the electricity market in three steps creating a competitive generating market by 2014, a wholesale market by 2022, and a competitive retail market after 2022.

The first stage of launching a competitive power generation system has been delayed several times. According to a statement on the government's website Thursday, the launch has been rescheduled for July 1.

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