Reporter: Sir, how do you evaluate the recently announced 4.5% electricity tariff adjustment?
Mr. Nguyen Tien Thoa
Mr. Nguyen Tien Thoa: In 2023, the power sector’s performance has been facing many difficulties. All fluctuations in fuels, input materials, etc. have sharply increased the production cost of the power sector. If calculated correctly and fully, the production cost is now about 178 VND/kWh, or 9.27% higher than the current average retail tariff. However, with the adjustment of the average retail electricity tariff on November 9, an increase of 4.5% is a restrained level, which has taken into account the inflation-control target and anticipated impacts on production operations and people’s life, so as not to adversely impact the country’s continued economic recovery and development to achieve the set growth goals.
It can be said that both recent adjustments to the average retail electricity tariff in 2023 have not yet realized the objective of covering the production costs of the power sector.
Reporter: In your opinion, is the average retail electricity tariff adjustment decision made appropriate at this time?
Mr. Nguyen Tien Thoa: Firstly, regarding legal regulations, Decision No. 24/2017/QD-TTg dated June 30, 2017, of the Prime Minister regulating the mechanism for average retail electricity tariff adjustment, allows electricity price adjustment every 6 months if input factors for electricity production and business increase. In fact, over the past 6 months, electricity production costs have been higher than the current average retail tariff.
Second, this year's inflation-control target set by the National Assembly is 4.5%; on average over the past 10 months, the inflation rate is 3.2%. Thus, there is still room to adjust electricity prices while inflation is controlled.
With calculations and considerations, adjusting the average retail electricity tariff at this time is acceptable.
Reporter: In your opinion, how will electricity price adjustment affect people, businesses, and the economy?
Mr. Nguyen Tien Thoa: No matter how much the electricity price is adjusted, it will have certain impacts on production operations and people’s life. The electricity price adjustment of 4.5% will affect inflation in 2 rounds: round 1 - directly and round 2 - affecting industries by about 0.29%.
For energy-intensive manufacturing industries such as steel and cement, electricity price adjustment will have the following impacts: increasing steel production costs by about 0.27%; cement by about 0.67%; textiles and garments by about 0.58%, etc.
For consumers, according to calculations by the Ministry of Industry and Trade, depending on each tariff ladder level, each household will have to pay an additional amount of VND 3,900-55,000 for electricity bills. In my estimation, on average, each household using electricity over 200kWh will have to pay an additional amount of about VND 18,600, etc.
Reporter: What recommendations do you have for people and businesses to use electricity economically and effectively to minimize the impact of electricity price adjustments?
Mr. Nguyen Tien Thoa: Recently, the Government, ministries, agencies, and Vietnam Electricity have proposed many solutions for economical and effective electricity consumption. They have carried out widespread and recurring communication activities for this purpose. However, I think that there is still a lot of room to save electricity more.
To use electricity properly, as for production industries, it is necessary to consider changing production shifts to off-peak hours when enjoying the cheapest electricity tariff; transforming production lines to the ones less energy intensive, etc.
For state agencies, in fact, their electricity consumption is wasteful. Therefore, I think there should be a survey, and as for state budget-funded agencies, the electricity cost should be included in their regular expenditures. At the same time, economic measures with rewards/punishments must be applied to raise awareness of reasonable electricity consumption habits, because the ongoing educational and communication solutions seem not very effective.
For people, with the applicable residential ladder electricity tariff, the more electricity they use, the higher price they pay. This is an economic measure for households to calculate how to use electricity economically, at lower ladder levels to save family expenses.
In addition, we should also have forms of commendation and reward with material benefits or other forms for units and individuals having effective and replicable electricity-saving initiatives. We need to join hands in implementing the energy-saving movement, in a context where electricity consumption demand will increase very high in the coming years, to serve production operations and people’s life.
Reporter: Sincerely thank you