How many times must electricity prices increase for EVN to erase all losses?

According to the Ministry of Industry and Trade, in October, assuming the electricity price increases by 3%, Vietnam Electricity Group (EVN) will earn about VND4,800 billion. Currently, the loss that EVN is reporting and the Ministry of Industry and Trade has proposed to allow the calculation of costs that have not been fully calculated in the next electricity price adjustments is nearly VND44,800 billion.

Impacting 30 million households

Thus, assuming a 3% increase each time, the electricity price must increase more than 9 times to cover the loss. If the increase each time is higher than 3%, the number of times the electricity price must be adjusted to cover the loss may be less.

Under current regulations, prices are adjusted every 3 months and assuming a low adjustment of 3%, it will take more than 2 years to fully compensate for EVN's losses, if any.

Previously, in the draft submission, the Ministry of Industry and Trade said that if the loss allocation is timely, the electricity price can only increase by 2-5% this year. Citing EVN's report, the Ministry said that if the electricity price increases by 3% from October this year, it will cause the Consumer Price Index (CPI) this year to increase by about 0.03%. Also according to the Ministry of Industry and Trade, if the average retail electricity price increases by 2-5% compared to the current price, EVN will prepare a plan for the average retail electricity price and report to the Ministry for inspection, review and comments as a basis for EVN to adjust the price. This level is lower than the current regulation of 3-5%.

Notably, the report of the General Statistics Office for the first 8 months of this year shows that the price of household electricity increased by 1.01% due to hot weather causing increased demand for electricity.

The Vietnam Association for Consumer Protection believes that it is necessary to study the impact on consumers and businesses when calculating old costs into future electricity prices.

PHOTO: D.NT

Commenting on the draft Decree 72, the Vietnam Association for Consumer Protection affirmed its great interest in the draft because determining the average retail electricity price affects nearly 30 million households that are buying electricity for daily use from EVN.

The Vietnam Association for Consumer Protection believes that the addition of costs from 2022 to the selling price for electricity users from 2025 onwards needs to be studied to be consistent with the principles of Decree 72 currently in effect: "Every year, after EVN publicly announces the annual electricity production and business costs, the average annual retail electricity price is reviewed and adjusted according to objective fluctuations in input parameters...".

"Moreover, it is necessary to study the impact on consumers and businesses," the Vietnam Association for Consumer Protection emphasized.

How many times must electricity prices increase for EVN to erase all losses?

Many questions need to be clarified

Expert To Van Truong wondered, of the nearly 44,792 billion VND loss, exactly how much was due to the difference in coal and imported gas prices? How much was due to EVN "holding down prices" according to instructions? How were foreign enterprises given preferential electricity prices? Specifically, how much came from high administrative and sales costs? And most importantly, what "hidden" reasons led to the losses being included?

"How many years will this loss allocation roadmap last? How much will each kWh of electricity increase, and what will be the specific impact on poor households and manufacturing enterprises? In addition, on the business side, what commitments has EVN made? Is there a plan to restructure, cut costs, streamline the apparatus, and divest from non-core areas, or is it simply "transferring losses" to people's bills?", Mr. To Van Truong wondered.

Expert To Van Truong emphasized that only when the above questions are made public with complete and reliable numbers will people be willing to share when they see that the difficulties are real and the distribution is fair.

"Financial transparency through independent auditing is an immediate requirement. Reforming the electricity market is the inevitable path," said Mr. To Van Truong.

In addition, this expert also cited experiences from countries facing similar challenges, that is, when electricity production input costs increase or there are losses in this industry, in principle, the burden should not be placed on the people, and the people should not be "paid for everything". For example, Thailand makes quarterly differences transparent and has a roadmap for sharing between the state, businesses and people; or when the KEPCO Electric Power Corporation (South Korea) suffered a record loss, the government of this country required the business to issue its own bonds to compensate in advance, and at the same time, it had to publicly announce its restructuring plan and cut down on non-core investments. The price increase was carried out step by step, linked to transparent commitments... Only then would it be in accordance with the principle of "harmonized benefits and shared risks" that the Prime Minister has repeatedly emphasized.

National Assembly delegate Phan Duc Hieu, member of the National Assembly's Economic and Budget Committee, said that the nature of the amount of nearly VND44,800 billion is a "policy loss" - buying high input, selling low output. "If we provide transparent information, have a long-term roadmap, carefully assess the socio-economic impact and consult widely with the people. I believe that when there is reason and emotion, the people will agree and support," Mr. Hieu stated his opinion.

Thanhnien.vn

Source: https://thanhnien.vn/gia-dien-phai-tang-bao-nhieu-lan-thi-evn-moi-xoa-het-lo-185250909092415353.htm