The burden of rising electricity prices

From October 11, 2024, Vietnam Electricity (EVN) will adjust the average retail electricity price to increase by 4.8%. This will put more pressure on people's living expenses and production and business activities of enterprises.

Impact on the economy

Ms. Le Thu Tra (living in Thanh Loc ward, district 12, Ho Chi Minh City) worried: “I have been working for a long time, about to retire, my family has 2 children in college. Currently, food prices are climbing, my children's tuition fees are also about to increase, now it's the turn of electricity prices to increase again. Each thing increases a little, adding up many expenses in a month also makes me feel pressured. The increase in electricity prices easily makes people think that the electricity industry is making losses and forcing people to bear the burden.”

Agreeing with Ms. Thu Tra, Mr. Nguyen Tu (office worker, residing in Tam Phu ward, Thu Duc city) said that the electricity industry's 4.8% price increase sounds small, but in fact it affects the entire economy, because everything increases evenly. The decision to increase electricity prices at this time is not reasonable, especially when many people in the localities are struggling to overcome the damage caused by storm No. 3.

Production activities at Tinh Loi Garment Company Limited, Lai Vu Industrial Park, Kim Thanh District, Hai Duong Province. Photo: QUANG PHUC

Manufacturing enterprises are equally worried. Toan Phat Irradiation Company Limited located in Phu An Thanh Industrial Park (Ben Luc District, Long An Province) irradiates dragon fruit and seafood before export, an activity that consumes a lot of electricity.

Mr. Vu Thuong Hien, Production Director of the company, said that when electricity prices increase, it will strongly affect the production costs of enterprises. Just counting the electricity bill after the price increase, enterprises have to pay nearly 10 million VND/month more. At a time when orders have not yet recovered and the market is facing many difficulties, the electricity price increase forces enterprises to calculate costs to compensate.

“Businesses cannot arbitrarily increase prices for fear of losing customers. Reducing costs and optimizing production processes is a must, but cannot be done immediately,” said Mr. Hien.

Similarly, Mr. Bach Hong Long, Deputy General Director of Garment Corporation 10, said that each month the company will have to pay an additional 15 million VND. Normally, when the price of electricity increases, many other things also increase in price.

Weather dependent roof voltage

The Vietnam Textile and Apparel Association acknowledged that the increase in electricity prices at the end of the year is a big challenge and difficulty for businesses due to great competition in the market, shortage of orders and recent recovery.

To adapt to the increase in production costs, including electricity prices, the textile industry has set out solutions for development goals, including investing in rooftop solar power (rooftop solar power). Currently, some enterprises such as May Viet Tien, May 10... have invested in rooftop solar power to reduce difficulties in electricity production costs. However, rooftop solar power cannot replace the national grid in industrial production, due to its dependence on the weather.

A dispatcher shift at Ho Chi Minh City Power Corporation

Analyzing EVN's recent move to increase electricity prices, Mr. Ngo Duc Lam, former Deputy Director of the Institute of Energy, said: Speeding up new power source projects is a fundamental solution for the electricity industry, instead of using electricity price increases to deal with EVN's losses.

Furthermore, electricity prices need to be stable to minimize adverse impacts on macroeconomic stability and social security. Because electricity is different from other products such as gasoline and oil, which are immediately affected by world prices, prices must be adjusted promptly.

According to economist Ngo Tri Long, former Deputy Director of the Institute for Price Market Research (Ministry of Finance), the industrial sector that uses a lot of electricity immediately sees the impact of the increase in electricity prices. There needs to be an independent agency responsible for assessing and controlling EVN's input costs to ensure that decisions to increase electricity prices are transparent, public, and harmonize the interests of all parties, especially the interests of electricity customers.

An economic expert further analyzed that with the economic growth rate of around 7% per year over the past period, the demand for electricity is very large. In order to ensure stable energy supply for the economy, the electricity industry must soon implement electricity planning, promptly connect to the grid and fully pay for electricity purchases of renewable energy projects that have been invested in before, to avoid waste as well as increase supply in a timely manner.

According to EVN's calculations, there are currently about 547,000 business service customers. With the increase in electricity prices, each household has to pay an average of 247,000 VND more per month. With 1.921 million production households, each household has to pay an average of 499,000 VND more per month...

DUC TRUNG

Source: https://www.sggp.org.vn/ganh-nang-gia-dien-tang-post763663.html