State utility Electricity of Vietnam, EVN, plans to seek government permission to raise power prices two times this year, saying higher input costs are placing a burden on the group that is already in huge debt.
Each of the increases will be at least 5 percent, but prices should remain unchanged for low-income families, news website thesaigontime.vn reported, quoting EVN Deputy General Director Nguyen Tan Loc.
EVN raised electricity prices by 5 percent last December, the second hike in 2011. The average power tariff is now VND1,304 per kilowatt-hour.
Loc said industrial manufacturers are consuming 47 percent of electricity in Vietnam, but power prices for some sectors, including steel and cement, are now 12-14 percent lower than the average tariff.
Prices should be raised to a more reasonable level, given the fact that EVN still has debts worth tens of trillions of dong to oil and gas group PetroVietnam and coal miner Vinacomin, Loc said.
He also warned of possible power shortages, saying many household consumers have switched to electrical cooking appliances following recent increases in prices of cooking gas.
Hoang Quoc Vuong, Deputy Trade and Industry Minister, told thesaigontime.vn, that electricity, coal and fuel prices, which are now subsidized, will be adjusted closer to market levels.
However, the government will have to consider any power price hike carefully in the interests of maintaining economic stability and keeping inflation under control, he said.
Vietnam is targeting to have inflation reduced to single digits this year. Consumer prices rose 16.44 percent in February from a year ago.
EVN reported an estimated loss of VND3.5 trillion in 2011 ($166.4 million), lower than its original projection of VND11 trillion. The group is expected to submit a restructuring plan to the government later this month.
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