The government has approved an increase of 6.8 percent in retail power prices from March 1, local newswire Vietnamnet quoted the Minister of Industry and Trade Do Huu Hao as saying Monday.
Hao said the price hike was based on an expected increase of 28 percent in coal prices this year.
Under a recently issued instructional circular issued by the Ministry of Industry and Trade, the increase would be applied to electricity used for daily life.
However, families using less than 50 kilowatt-hours per month will not be affected by the rise in prices and will continue to pay the current price of VND600 a kilowatt-hour given as a support to poor people.
Retail power prices for those consuming more than 50 kilowatt-hours a month range between VND850-1,790 per kilowatt-hour at present.
According to the circular, retail power prices for commercial use, including production and trading services, would go up by 6.1 - 6.3 percent.
The increase in power prices would have no great impact on the economy, the ministry said, adding that it would reduce the countryââ‚¬â„¢s gross domestic product growth by around 0.34 percent and push up the consumer price index up by a little more than 0.2 percent.
The ministry had had proposed an increase of 4.9 percent in retail power prices, while the national power utility, Electricity of Vietnam had asked for 6.9 percent.
The Ministry of Finance early this month had suggested an increase of 10.7 or 6.8 percent in retail power prices.
The last adjustment in retail power prices was made last March, with a 13 percent in increase for electricity used for non-commercial purposes and 6 to 7.5 percent for production purposes over 2008 prices, according to newswire VnExpress. Source: Thanh Nien