Vietnam Electricity has sought the Government’s permission to hike power tariffs soon saying production costs have risen sharply.
The average electricity price was increased by 3% on May 4 to VND1,920.37 (8 U.S. cents) per kilowatt-hour (kWh).
But the cost of production had surged by 9.27% last year to VND2,032.26, and so its financial situation has not improved even after the price hike, according to the state utility.
EVN, the country’s sole power distributor, faces cash flow difficulties and is likely to default on payments to independent power producers.
It has sought interest-free loans from the central bank to pay them.
Over the past two years EVN has reduced spending on repairs by 10-50% due to the cash crunch, severely affecting the safety of the electrical network.
EVN made a loss of over VND36.29 trillion in 2022, the Ministry of Industry and Trade said.