Vietnam May Raise Electricity Prices

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Jan. 15 – Vietnam may increase retail electricity prices by up to 10 percent to attract more investment in the energy sector.

The industry is struggling to meet the country’s energy needs. Electricity rates in Vietnam are much lower compared to other countries in the region making it less attractive to potential investors, the Vietnam Economic Times quoted Vice Minister of Industry and Trade Do Huu Hao as saying.

The proposal to increase prices was submitted last month pending the approval of the Prime Minister Nguyen Tan Dung.

Currently, electricity rates in Vietnam are at VND862 (about US$0.05 cents) per kilowatt hour, while manufacturers pay VND900 (US$0.052 cents). In comparison, Thailand, Singapore, Indonesia and Malaysia rates range from US$14 cents to US$15 cents. Even in China, electricity rates are at US$0.075 cents per kilowatt hour.

Vietnam’s economy rates as the fastest in the region at 8.5 percent in 2007 and 6.2 percent in 2008. Families who consume less that 50 kilowatts an hour monthly will not be included in the price hike under government subsidies.

The government predicts that the country’s power demand will expand by 16 percent annually until 2015. Vietnam’s power needs as a growing economy cannot keep up with demand.