HOW DOES ELECTRICITY PRICE INCREASE AFFECT DAILY LIFE?

Recently, the adjustment decision to raise electricity prices has drawn the attention of the public, especially households and businesses that consume a lot of electricity for daily life and work.

According to information released by Vietnam Electricity (EVN):

• “Following a 3% increase in May, each kWh of electricity will increase by another 4.5%, effective from November 9th. The average retail electricity price (electricity price) will rise from VND 1,920.37 to VND 2,006.79 per kWh (excluding VAT), equivalent to a 4.5% increase. This decision has been approved in principle by the Government and the Ministry of Industry and Trade.”

• Although the government has a policy to support electricity costs equivalent to 30kWh for certain groups, with the relatively high electricity usage density at the end of the year, this situation has not improved. For heavy users, from 400 kWh upwards, Mr. Dung said the amount to be paid increases by about VND 55,600 per month, but this is a relatively high-income group, so “it is less affected.”
• EVN estimates that the additional monthly electricity bill for business service customers is VND 230,000; for production, VND 432,000; and for administrative and public services, VND 90,000.

Source: vnexpress

• After the increase, the electricity price is still lower than the production cost. EVN representatives explained that in 2023, several input parameters affected costs, including a 17 billion kWh decrease in hydropower output—a cheap source of electricity. Input fuel prices remained high, with imported coal increasing by 186% compared to 2020; domestic coal increased by nearly 30-46% compared to 2021 prices. Oil prices also increased by 18% compared to 2021, especially with foreign exchange rates rising by nearly 4%, directly affecting electricity purchase costs and EVN’s electricity production costs.
• Production costs account for 83% of the cost. With current input fuel costs, according to EVN’s calculations, the production cost per kWh is about VND 2,098, which is nearly VND 180 per kWh higher than the average retail price maintained since May (VND 1,920.37).
• Last year, the group lost more than VND 26,000 billion after reducing costs by over VND 10,000 billion. EVN has also introduced solutions to cut 15% of regular costs at units, significantly reduce major repairs, and save lighting electricity at agencies and corporations.
• The current electricity price situation continues to rise, and we can see that this is having a major impact on the spending of households and businesses. This is a major challenge for everyone, and to avoid the most difficult situations, we need to find measures to ensure a stable power supply for ourselves and our families.
• In that context, installing solar power systems for households becomes very necessary. It not only reduces pressure on the general power supply but also produces clean electricity, reducing the monthly electricity bill. This not only brings economic benefits but also actively contributes to environmental protection.

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Source: VNExpress