To increase electricity average retail prices in Vietnam from October 11, 2024

To increase electricity average retail prices in Vietnam from October 11, 2024 (Image from the internet)

On October 11, 2024, the Ministry of Industry and Trade of Vietnam issued Decision 2699/QD-BCT stipulating electricity prices.

To increase electricity average retail prices in Vietnam from October 11, 2024

The average retail electricity price increases by 4.8%, rising from 2,006.79 VND/kWh to 2,103.1159 VND/kWh (excluding value-added tax).

Effective date for applying the electricity price: from October 11, 2024.

Wherein, the electricity retail prices for customer groups are as follows:

Mechanism for adjusting annual electricity average retail prices in Vietnam

As stipulated in Article 5 of Decision 05/2024/QD-TTg, the mechanism for adjusting the annual electricity average retail prices is as follows:

- Based on the electricity supply plan and the operation of the electricity system for the year N issued by the Ministry of Industry and Trade, the results of the inspection of electricity production and business costs for year N-2 as stipulated in Article 7 of Decision 05/2024/QD-TTg, and estimating the electricity production and business results for year N-1 (in case the inspection results of electricity production and business costs for year N-1 are not yet available), before January 25 of year N, Vietnam Electricity Corporation calculates the average electricity price according to the formula stipulated in clause 2, Article 4 of Decision 05/2024/QD-TTg and performs the required documentation as stipulated:

+ In the case where the calculated average electricity price decreases by 1% or more compared to the current average electricity price, Vietnam Electricity Corporation is responsible for reducing the average electricity price correspondingly. Within 5 working days from the date of adjustment, Vietnam Electricity Corporation is responsible for preparing a report to the Ministry of Industry and Trade, cooperating with related Ministries and agencies for inspection and supervision.

+ In the case where the average electricity price needs to be adjusted to increase by 3% to less than 5% compared to the current average electricity price, Vietnam Electricity Corporation decides to adjust the average electricity price accordingly. Within 5 working days from the date of adjustment, Vietnam Electricity Corporation prepares a report to the Ministry of Industry and Trade, cooperating with related Ministries and agencies for inspection and supervision.

+ In the case where the average electricity price needs to be adjusted to increase by 5% to less than 10% compared to the current average electricity price, Vietnam Electricity Corporation is allowed to adjust the average electricity price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade. Within 15 working days from the receipt of the complete pricing plan dossier from Vietnam Electricity Corporation, the Ministry of Industry and Trade is responsible for responding in writing for Vietnam Electricity Corporation to implement. Within 5 working days from the date of adjustment, Vietnam Electricity Corporation is responsible for reporting to the Ministry of Industry and Trade.

+ In the case where the average electricity price needs to be adjusted to increase by 10% or more compared to the current average electricity price or affecting the macroeconomic situation, based on the electricity pricing plan dossier submitted by Vietnam Electricity Corporation, the Ministry of Industry and Trade takes the lead to inspect, review, and send for comments from the Ministry of Finance and related Ministries and agencies. Based on feedback from the Ministry of Finance and related Ministries and agencies, the Ministry of Industry and Trade compiles a report to the Prime Minister of the Government of Vietnam for consideration and advice. If necessary, the Ministry of Industry and Trade cooperates with related Ministries and agencies to report to the Price Steering Committee before reporting to the Prime Minister of the Government of Vietnam.

- The annual average electricity pricing plan dossier of Vietnam Electricity Corporation includes:

+ An official dispatch report on the annual average electricity pricing plan of Vietnam Electricity Corporation, including content analysis and evaluation of electricity production and business cost situations in various stages;

+ Additional contents accompanying the official dispatch report on the annual electricity pricing plan of Vietnam Electricity Corporation include: calculation cost principles for each stage (electricity generation, transmission, distribution - retail sale of electricity, system regulation and power market transaction management, industry operation - management), including principles to forecast input parameters such as exchange rates, domestic fuel prices, and imported fuel prices, projected new power plants expected to be in operation during the calculation year but without power purchase agreements; a summary table of calculation results for each stage; a detailed table of calculation costs for each stage; documents and written materials used as the basis for calculation; explanations of cost standards and unit prices used in calculating projected costs for year N of each stage (if any); explanation of electricity production costs not included in the electricity price but allocated to production business costs and the residual amount expected to be allocated into the average electricity price for year N; assessment reports on the impact of electricity price adjustments on electricity purchase costs of electricity users.

+ The entire annual average electricity pricing plan dossier is stored on data storage devices attached to the report on the annual electricity pricing plan of Vietnam Electricity Corporation.

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