How will 3% increase in electricity prices affect people's lives and economy?

This is one of the issues of great concern to the public after the Ministry of Industry and Trade issued Decision No. 1062/QD-BCT dated May 4, 2023, on the new electricity retail tariff schedule to be applied from May 4, 2023. Vietnam Electricity (EVN) held a meeting to clarify information about the adjustment of electricity retail tariff under the new decision on the afternoon of May 4, 2023, in Hanoi.

Minimizing impacts on the economy and people's lives

To minimize impacts on the economy and people's lives, following the direction of the Ministry of Industry and Trade, Vietnam Electricity issued Decision No. 377/QD-EVN dated April 27, 2023, on the adjustment of the average retail tariff of electricity. Accordingly, the average retail tariff would be VND 1,920.3732/kWh (excluding value-added tax) from May 4, 2023. This adjustment is equivalent to an increase of 3% compared to the current average electricity retail tariff.

At the event, many journalists and reporters expressed concern about the impact of a 3% increase in electricity prices on households. According to EVN’s Vice President Vo Quang Lam, Vietnam Electricity has carefully considered its impacts on every group of households.

Specifically, after electricity prices increase from May 4, 2023, the increase in electricity bills of households consuming less than 50 kWh/month is VND 2,500/household.

For households using electricity from 101-200 kWh per month - the biggest group among residential customers - the monthly increase in electricity bills is VND 11,100/household.

Regarding the impact of electricity price increase on the consumer price index (CPI), according to calculations of the Ministry of Finance, if electricity price increases by 5%, CPI will increase by 0.17%. Currently, with a 3% increase in the electricity price, the impact on CPI will be negligible. As for electricity-intensive manufacturing industries such as steel, cement, and paper production, the production cost of steel will increase by 0.18%, of cement will be about 0.45%, and of paper production about 0.4%.

According to statistics in 2022, EVN is selling electricity to 528,000 service business customers. On average, business customers pay VND 5.3 million/month for electricity. After the price change, on average, each customer will pay an additional VND 141,000/month.

EVN also serves 1,822 million production households. On average, each production household pays VND 10.6 million/month for electricity. After the tariff adjustment, their extra electricity bill per month will be VND 307,000.

With 662,000 administrative and non-business customers, each customer pays an average electricity bill of VND 2.01 million/month. After the tariff adjustment, customers of this group will pay an additional VND 40,000/month.

EVN's leader frankly and explicitly talking about electricity retail tariff adjustment on May 4, 2023. Photo: H. Linh

EVN has been deploying many cost-saving solutions, calling on customers to save electricity

At the meeting, the EVN’s leader stated that the current situation of electricity supply in 2023 faces many challenges. It is forecasted that this summer will record the hottest temperature, whereas hydrological conditions are unfavorable. EVN is making great efforts to operate the power system safely and stably. EVN calls on people and businesses to join hands to save electricity at the highest level, thereby practically saving living costs of households; saving production costs of businesses, and improving product competitiveness. The electricity saving will contribute to alleviating power system operation stresses in the hot season.

  • 04/05/2023 06:13
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