Retail electricity tariff swells 8.36 per cent

2019 electricity tariff scenario is outlined in the wake of considering input factors and regulating differences as prescribed in Decision No. 24/2017/QD-TTg.

Nguyen Anh Tuan, head of the MoIT Electricity Regulatory Authority, told VOV that the 2019 electricity tariff scheme has been outlined following the assessment of electricity production and business expenses of state-owned Vietnam Electricity group.

The scheme had undergone reviews by the MoIT and the Ministry of Finance. It was then reported to the government’s Steering Committee on Price Management and permanent government members.

Earlier, the MoIT in alliance with the General Statistics Office of Vietnam (GSO) had mulled over the impacts that the electricity price surge would have on consumer price index (CPI), producer price index, and gross domestic product (GDP), Tuan said.

“The electricity tariff scenario set for 2019 has been made on the basis of considering input factors and regulating differences as prescribed in the government’s Decision No. 24/2017/QD-TTg dated June 30.”

In early March, MoIT Deputy Minister Hoang Quoc Vuong stressed that the tariff hike of 8.36 per cent has been calculated in relation to the fulfillment of socio-economic development goals set by the National Assembly for 2019.

The price hike was advocated by the government in a partly attempt to curb CPI growth and inflation as well as maintain macroeconomic stability at large.

The GSO analysis shows that the tariff adjustment could potentially make the country’s GDP growth fall by 0.22 per cent and the CPI edge up by 0.29 per cent.

Vietnam has so far made similar changes to electricity tariffs, seven times in total since 2010. Most previous electricity tariff hikes exceeded 6 per cent. In 2017, the electricity tariff increased by 6.8 per cent while 2011 saw an increase of more than 15 per cent.