The electricity sector owes the people transparency.

Without publicly disclosing the pricing structure and ignoring the responsibility to solicit public opinion, many experts believe that transparency is the biggest debt the electricity sector owes to businesses and the public following the unexpected price adjustment on August 1st.

Following the approximately 30% increase in the price of input coal in April of this year, the public, businesses, and experts alike have somewhat anticipated an increase in electricity prices in the near future. In every press conference held by the Ministry of Industry and Trade and the Government since then, the question "when will electricity prices increase?" has always been raised.

Responding to the press, leaders of the Electricity Regulatory Authority and the Ministry of Industry and Trade have repeatedly stated that they are requesting the Vietnam Electricity Group (EVN) to calculate the resulting costs in order to make reasonable adjustments. Even just one day before the price increase announcement, Minister and Head of the Government Office Vu Duc Dam said that the specific timing of the price increase would be considered, while also reminding the electricity sector to exercise caution. "The electricity sector and EVN must have a plan to communicate and explain the situation, and gather public opinion before raising electricity prices," he said.

With Circular 19 issued on July 31st, the Ministry of Industry and Trade surprised the public by allowing a 5% increase in the average electricity price just hours later. A representative from Huu Lien Asia Steel Company, responding to this news, said: "Although we had heard rumors about the electricity price increase, we didn't think it would happen so quickly." The owner of a mechanical manufacturing business in Hanoi openly expressed his frustration: "The information one day was different from the information the next."

Electricity prices have increased four times, each time by 5%, since the end of 2011.

Commenting on this unexpected electricity price increase, economist Ngo Tri Long believes it is a consequence of a lack of agreement between the government and the electricity sector. Another economist remarked: "It's hard to imagine the left hand not knowing what the right hand is doing. Such a hasty adjustment will contribute to inflation because electricity prices are linked to all goods and everyone."

While expressing sympathy for the electricity sector regarding the pressure of having to raise prices, Dr. Le Dang Doanh disagreed with the approach. He argued that instead of explaining the reasons for the price increase as usual, EVN should publicly disclose the price increase roadmap so that people are aware. "Furthermore, they should clearly state how they have reduced transmission line losses and what measures they have taken to lower costs so that people can understand and sympathize," he analyzed.

Concurring with the above opinion, expert Pham Chi Lan commented: "With electricity, there has always been only one direction: increasing, never decreasing. It seems that not only EVN but also the entire operator owes the people transparency and openness regarding electricity prices." With the current management style, many experts believe that this debt will be difficult to repay fully and satisfactorily.

In fact, since the end of 2012, the electricity sector has stated it would increase prices by about 7%. Mr. Doanh commented that due to government restrictions, EVN has only now been allowed to increase prices. "With coal prices having increased by 30%, it is highly likely that EVN's electricity prices will not stop at just 7%," Mr. Doanh predicted.

Although pointing out inconsistencies with current regulations, Lawyer Tran Minh Hai - Director of Basico Law Firm - said that only the Ministry of Justice has the authority to determine whether a document is properly issued. "Currently, there is no mechanism to guarantee administrative appeals if a legal document causes dissatisfaction or affects the rights of citizens and businesses," he said.

According to Clause 1, Article 78 of the Law on the Promulgation of Legal Normative Documents of 2008, the effective date of a legal normative document is stipulated not to be earlier than 45 days from the date of publication or signing. While there are exceptions, cases where a document is applied immediately are usually urgent and timely to meet the requirements of disaster prevention and control or epidemic prevention. However, according to experts, electricity is a monopolized commodity that cannot be speculated on, and the price adjustment roadmap has been calculated "for many years," so the issuance of such an "immediate" document is very difficult to justify.

Despite expressing their frustration, businesses and citizens alike are no longer unfamiliar with the rapid price increases by the power company, exemplified by the recent adjustment where prices were raised the very next day after the circular was issued. Since mid-2011, Government Decision 24 (effective from June 1, 2011) has allowed businesses, although still required to report to the Ministry of Industry and Trade, to almost independently adjust prices within a 5% threshold. Since then, electricity prices have steadily increased four times, all within a 5% margin (on December 20, 2011, July 1, 2012, December 22, 2012, and August 1, 2013).

Mr. Ngo Tri Long commented that any price increase, especially for monopolized products, will never satisfy consumers. Therefore, the electricity sector needs to demonstrate whether such price increases are reasonable. "The electricity sector needs to clearly explain the current cost structure, the proportion of coal and gas costs, and whether the price increase is intended to cover losses from investments outside the sector and energy losses," he said.

According to VnExpress - TH