The Government of Vietnam to require the completion of the plan to adjust the average retail price of electricity

The Government of Vietnam to require the completion of the plan to adjust the average retail price of electricity (Internet image)

The Government of Vietnam issued Resolution 50/NQ-CP dated April 8, 2023 on the Government's meeting with localities and the Government's regular meeting in March 2023.

1. The Government of Vietnam to require the completion of the plan to adjust the average retail price of electricity

Specifically, in Resolution 50/NQ-CP, the Ministry of Industry and Trade of Vietnam is assigned the task of presiding over and coordinating with the following agencies and localities:

- Ensuring the supply of petrol and oil for the domestic market in all situations and managing petrol and oil prices according to regulations; urgently submitting to the Government the Decree amending and supplementing Decree 95/2021/ND-CP and Decree 83/2014/ND-CP on petrol and oil trading. Finalize the plan to adjust the average retail price of electricity in accordance with the new price bracket and according to the provisions of law.

- Continue to support localities to promote e-commerce development. Propagating and promoting consumption policies, stimulating domestic consumption demand, and effectively exploiting the domestic market. Strengthen market management, fight against smuggling, commercial fraud, and counterfeit goods.

- Continue to expand and diversify export markets towards new and potential markets such as India, Africa, the Middle East, Latin America, Eastern Europe... Promote the effective exploitation of Free Trade Agreements (FTAs) and promote negotiation and signing of new FTAs.

Facilitating and enhancing digital transformation in granting preferential C/O certificates of origin, supporting businesses to take advantage of commitments in FTAs. Focus on innovating and strengthening trade promotion activities. Promote the development of logistics services, reduce costs, and improve the competitiveness of Vietnam's exports.

2. Bases for setting and adjusting the electricity prices in Vietnam

According to the provisions of Article 30 of the Electricity Law 2004 (amended 2012), the bases for setting and adjusting the electricity prices in Vietnam are:

- The electricity price policies.

- The socio-economic development conditions of the country, people's incomes in each period.

- The electricity supply-demand relationship.

- The electricity production and business costs and reasonable profits of electricity units.

- The electricity market development grades.

- The financial statement has been audited annually of the electricity unit.

3. Regulations on electricity prices and assorted charges

Regulations on electricity prices and assorted charges under Article 31 of the Electricity Law 2004 (amended 2012) are as follows:

- The electricity retailing prices shall be elaborated by the electricity retailing unit based on the price frame of average electricity retail price, mechanism of adjustment of price and structure of the electricity retail price table prescribed by the Prime Minister in conformity with the level of development of the electricity market, except for the case specified in clause 2 Article 62 of the Electricity Law 2004.

The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Finance to elaborate the price frame of the average electricity retail price, mechanism of adjustment of price and structure of the electricity retail price table and submit them to the Prime Minister for decision.

The adjustment of the electricity retail price must be implemented publicly, transparently regarding changes of component elements relating to adjustment of price. The State uses measures to stabilize the electricity sale price in conformity with provisions of law on price.

- The brackets of electricity generation prices, electricity-wholesaling prices, electricity transmission prices, prices of auxiliary services for electrical system, charges for regulating the electric-system operation and charges for electricity market transaction administration shall be elaborated by the concerned electricity units and appraised by the electricity-regulating agency before they are submitted to the Minister of Industry and Trade, the Minister of Finance for approval under assignment of the Government, except for the case specified in clause 2 Article 62 of the Electricity Law 2004.

The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Finance to guide methods to elaborate the brackets of electricity generation prices, electricity-wholesaling prices, electricity transmission prices, prices of auxiliary services for electrical system, charges for regulating the electric-system operation and charges for electricity market transaction administration.

- The electricity-generating prices under the contracts of electricity purchase with a defined term, the electricity-wholesaling prices are implemented under agreements of electricity units but not exceed the frame of electricity generation prices, electricity-wholesaling prices have been approved.

- The electricity prices for spot dealings shall be formulated at the time of transaction on the electricity markets and publicized by the electricity market transaction-administering units in accordance with the provisions of Points f and h of Clause 1, Article 21 of the Electricity Law 2004.

More details can be found in Resolution 50/NQ-CP dated April 8, 2023.

Vo Van Hieu

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