Electricity of Vietnam, the country’s power distribution monopoly, said last week that a serious electricity shortage would ensue this month due to rapidly increasing demand and the slow construction of new power plants.

The national power supply will fall between 1,500 megawatts and 2,500 megawatts below demand from 7 a.m. to 9 p.m. every day this month, according to EVN.

Power consumption in the second half of the year would increase by 17 percent from the first half’s 36 billion kilowatts, EVN chief executive officer Pham Le Thanh told the session.

Leaders of textile and steel corporations attending the session, which was broadcast live on TV, said they were more worried about a power shortage than they were concerned about money shortages and rising material costs.

Hai, a former industry minister, asked power-related corporations to speed up their electricity and oil refinery projects.

He asked state-owned oil and gas group PetroVietnam, which has invested in several power projects, to cut short the trial run of its new power utilities, including Nhon Trach 1, Ca Mau 1 and Ca Mau 2, in order to have them fully operational as soon as possible.

Industry and Trade Minister Vu Huy Hoang ensured that the prices of electricity and coal would remain the same until the end of the year.

A representative of the major fuel import-export company Petrolimex said the government had spent VND1.8 trillion (US$106.8 million) in subsidies to stabilize fuel prices over the first half of the year.

The economy, which depends entirely on imported fuels, spent over $33 billion for that purpose over the same period, a 30 percent year-on-year rise.

Vietnam’s first oil refinery, Dung Quat, which is slated to open in 2009, is expected to meet 30 percent of the country’s fuel demands, the Petrolimex representative said.

Curbing the deficit

Hai said the country had to strive to increase exports and tighten imports to reduce the trade deficit, which totaled nearly $14.8 billion in the first six months, or nearly 50 percent of exports over the same period.

The government announced a plan earlier this year to increase exports by 25 percent from last year to $60 billion.

Hai, however, said the export growth rate target had now been raised to 28 percent to make sure the deficit would be kept below $20 billion.

He said containing inflation, which soared by over 18.4 percent over the first six months through June, would continue to be a major task through the end of the year.

He called for the ministry and state-owned corporations to tighten their investments, chop unnecessary projects and focus their resources on projects essential to increasing imports and strengthening the economy’s competitiveness.

Reported by Minh Quang – Thu Hang