By mid-December the Ministry of Industry and Trade will submit to the Government a specific adjustment plan to increase electricity prices in 2013.
At a press conference on December 3, an official from the Ministry of Industry and Trade informed that the average cost of electricity in 2011 was VND1,226 per kWh and the cost of electricity production in 2012 is VND56 per kWh higher.
Vietnam Electricity Group (EVN) plans to issue bonds as a way to tackle its mounting debt.
According to EVN, electricity production for the first 11 months of 2012 reached more than 105 billion kWh, an increase of 13.4 per cent as compared to the same period last year.
The state-run company said it incurred a loss of VND5.3 trillion in 2011 alone, as the VND1,226 per kWh power retail price was lower than the cost price of VND1,282 per kWh.
In 2012, EVN losses are estimated at about VND3,100 billion.
Dinh Quang Tri, deputy director general of EVN, said in Hanoi on Monday, “EVN is considering and working on procedures to issue bonds worth VND9,000 billion (US$435 million) for 2-3 years to repay its debts”.
He said one of the main reasons for EVN losses was the unfavorable weather conditions which affected the hydro-electricity production during the dry season.
Other reasons include fluctuation of currency rates and high fuel prices, which have increased production costs.
The official added that the Ministry of Industry and Trade is reviewing the electricity supply capacity for next year based on the balance of losses in order to submit to the Prime Minister a price adjustment plan for 2013.
People believe that though the 2013 roadmap for electricity price management has yet to be released; it should be acknowledged that prices will only be on an upward trend next year.
EVN and the Ministry of Industry and Trade both said it is certain that power prices will be adjusted next year.
“There will only be an increasing trend in electricity prices,” the company CEO said.