HCMC – Vietnam Electricity Group (EVN) has proposed hiking retail electricity tariffs in the near future to address its financial losses.
The proposal was made in a report sent to a conference titled “Mechanism, Policy and Solutions for Sustainable Energy Development” held on July 28.
Since May 4, the average retail electricity tariff has already increased by 3% to VND1,920.37 per kWh. However, this rate is only one-third of the 9.27% hike in the average electricity price for 2022. As a result, EVN’s financial situation has not improved since the latest tariff adjustment.
At present, retail electricity tariff revisions are based on Decision 24/2017, with adjustments occurring every six months in response to rising input costs. If EVN’s proposal is approved, the next electricity tariff revision may take place at the end of this year.
Persistent losses have caused cash flow difficulties for EVN, affecting its operations from this month until year-end. EVN now owes significant payments to electricity suppliers and may struggle to meet these financial obligations.
To address this cash shortage, EVN has suggested that the Government instruct the State Bank of Vietnam (SVB) to provide it with interest-free loans for debt payments.
Over the past two years, EVN has already cut its maintenance service funding by 10%-50% due to financial problems. Continued cuts to maintenance costs this year will have a detrimental impact on the security of the national power grid.
The untimely adjustment of average electricity tariffs in 2022, coupled with the high costs of electricity purchase, has resulted in EVN losing over VND36,200 billion from power generation and trading.
