Retail electricity price increases 8.36 percent

Vietnam has raised its retail electricity prices by 8.36 percent from 1,720.65 VND (7.49 US cents) per kWh to an average of 1,864.44 VND (8.03 US cents). The price hike took effect on 20 March. This increase may put upward pressure on inflation, but may also help the Southeast Asian country attract private investment to develop the additional power plants that are needed to support its fast-growing economy, in particular renewable energy plants. The Ministry of Industry and Trade pointed out that Vietnam’s inflation this year would nevertheless be kept below 4 percent as targeted by the National Assembly. According to the Saigon Times, the price adjustment could potentially make Vietnam’s GDP growth fall by 0.22% and the CPI edge up by 0.29%. Subsequently, many households and enterprises complained about sudden and significant increases in their electricity bills for April. The MOIT countered that the surge in bills would be only partially due to the increase in electricity prices, with the unusual hot weather conditions and the resulting increase in households’ electricity consumption. Nevertheless, MOIT Minister, Tran Tuan Anh, on request of the Prime Minister, announced that his ministry will set up inspection teams at electricity companies to verify calculation methods for the price hike and to ensure strict compliance with the proper implementation of the decision.