National power utility Electricity of Vietnam has sought government permission to increase power prices in September, saying it is facing huge losses.
The group, known as EVN, is calculating a reasonable price hike to cover its losses, Deputy General Director Duong Quang Thanh told Industry and Trade Ministry officials at a meeting Thursday.
Thanh said in the first eight months alone, EVN made losses of more than VND2 trillion, following up on losses of more than VND8 trillion in 2010.
The government this year approved a policy allowing the state utility to adjust power prices once every quarter, instead of once a year. But it decided to delay the policy later on inflation concerns.
After a hike of more than 15 percent in March, the current average retail price is 6 cents per kilowatt-hour. Since the increase, EVN has been complaining that it's still not making any profit and has had difficulty financing new power plants.
Due to low water levels at hydropower reservoirs and maintenance work on two major gas pipelines, Vietnam may face power shortages in the next two months, EVN said this week.
The Ministry of Industry and Trade on Monday told EVN to borrow VND10 trillion from local banks to pay debts to power providers, including state-run oil group PetroVietnam and coal mining group Vinacomin, according to the Tuoi Tre newspaper.
Delayed debt payments have affected the ability of the providers to generate electricity, the newspaper said.