Reporter: Sir, in 2022, how has the world energy price affected the energy market in Vietnam?
Assoc. Dr. Dinh Trong Thinh
Mr. Dinh Trong Thinh: The year 2022 is very different from previous years. Countries around the world are growing at a slower rate, while inflation is very high. At the same time, the war between Ukraine and Russia is also one of the reasons behind the remarkable increase in fuel prices such as petrol, oil, and gas. In particular, the upsurge in gas prices has caused electricity generation costs in European countries to escalate; consequently affecting prices of alternative energy fuels for power generation such as coal, oil, etc.
Currently, Vietnam has relatively extensively and intensively integrated with the global economy. Therefore, global prices of raw materials as well as services, production and business costs, etc. will have a direct impact on Vietnam, in which the energy sector is no exception.
Reporter: Sir, EVN has just informed that electricity generation cost has increased due to an abrupt increase in fuel prices; therefore EVN has reported to and proposed the Government consider an electricity price adjustment. What’re your views on this issue?
Mr. Dinh Trong Thinh: In 2020, and 2021, when the COVID-19 pandemic broke out, to serve the pandemic prevention and control as well as to meet other requirements in order to keep a macroeconomic balance, stabilize the country's economy, most of the prices of raw materials, fuels, and public services were requested to remain stable and steady.
However, up to now, when the economy has recovered, grown, and developed, the proper and full calculation of input costs for production and business activities in many fields is a right and essential need. Therefore, I think it's time to consider the impacts of input material prices, production costs, transportation costs, etc. on EVN's operations; based on that, an appropriate level of electricity price adjustment can be contemplated.
Reporter: In the absence of an electricity price adjustment, how will EVN's operation be affected, sir? And what recommendations do you have for managing electricity prices in the near future?
Mr. Dinh Trong Thinh: Electricity plays a very important role in production, business activities, and people's life. Therefore, ensuring sufficient electricity supply to meet the needs of the economy is a mission that EVN must fulfill.
Failure to properly and fully calculate input costs for electricity production and business activities will cause huge losses for EVN. This is unreasonable from the market economy perspective.
If the Government persists in maintaining electricity prices, I think the Government should take measures to compensate for losses of EVN, as well as of the industries whose prices are administered and regulated by the Government. However, this will put great pressure on state budget spending and balance; and that is not in accordance with the rules of a market economy.
Our country's economy is a socialist-oriented market economy, under the management and regulation of the State, in order to realize the goals of rich people, a strong country, a just, democratic, and civilized society. In order for no one to be left behind, it is necessary to have the Government’s interventions. However, it is necessary to respect the rules of a market economy, especially when Vietnam has extensive international integration and made commitments with regions and countries that have signed bilateral and multilateral free trade agreements. Therefore, the calculation of electricity prices as well as prices of public services and goods regulated by the State according to market-based input prices is one of the urgent requirements today.
PV: Thank you very much!