Electricity prices may increase by 143.79 VND/kWh in March.

According to the Ministry of Industry and Trade's recent report on electricity price management scenarios for 2019: Based on input factors, the projected average retail electricity price in 2019 is expected to increase by approximately 8.36% compared to the current average price (1,720.65 VND/kWh), corresponding to an average retail electricity price of approximately 1,864.44 VND/kWh.

Therefore, the average retail price of electricity is expected to increase by 143.79 VND/kWh.

The Ministry of Industry and Trade will report to the Prime Minister to request permission to adjust retail electricity prices during the period from March 20 to 30.

The average retail price of electricity is expected to increase by 143.79 VND/kWh in March 2019.

Regarding the reasons for the electricity price increase, the Ministry of Industry and Trade provided an analysis of a series of factors affecting electricity prices in 2019. Specifically, concerning the input factors of electricity prices in 2019: Domestic coal prices have undergone the first adjustment with an average increase of 5%, increasing electricity purchase costs by approximately VND 3,183 billion; blended coal (a mix of imported and domestically produced coal) has been more expensive than domestic coal since January 16th, increasing electricity purchase costs by approximately VND 1,921 billion...

The 2019 electricity pricing plan also included calculations of fuel costs that the Government allowed to be adjusted in sync with electricity price adjustments, such as: the second phase adjustment of domestic coal prices sold for electricity production according to the increase schedule approved by the Government. This resulted in an additional electricity purchase cost of approximately 2,230 billion VND.

In addition, gas prices for some power plants have been adjusted, meaning 100% of gas turbine plants will purchase gas at market prices. This adjustment of gas prices under long-term contracts to market prices has increased electricity purchase costs by approximately VND 5,852 billion.

In addition, the 2019 electricity pricing plan also includes calculations for outstanding exchange rate differences that have not yet been included in the electricity price.

Deputy Minister of Industry and Trade Hoang Quoc Vuong stated: The increase in electricity prices contributed 0.29% to the Consumer Price Index (CPI) in 2019, having a very direct impact on our economy. Rising prices of any commodity affect the CPI, and to some extent, GDP. In the long term, we need an electricity sector with sound financial capacity to invest in power projects, ensuring electricity supply for the development of other economic sectors.

"Because the impact of not having electricity is even greater than raising electricity prices. Raising electricity prices reduces GDP by 0.22%, but without electricity, it could decrease by several percent. That's something we must consider to ensure a stable electricity sector," Mr. Vuong said.