The average retail prices of electricity are set to be adjusted than every three months starting from May 15.
The decision, signed recently by Deputy Prime Minister Le Minh Khai, allows the adjustment of the average retail prices in the event of changes in the prices of its input costs including production, transmission, distribution, management and support services among others.
If input costs fall by 1% than the in-effect average retail price, it must be adjusted down. In the event the input costs rise by more than 3%, it can be adjusted up, with a minimum waiting period of three months between each adjustment.
The minimum waiting period between price adjustments was six months previously.
Vietnam Electricity (EVN) will be given autonomy to implement a price increase within the range of 3-5%. Within five working days since the beginning of an adjustment, the EVN must report to the Ministry of Industry and Trade (MoIT), among other ministries and governmental agencies, to form a schedule for inspection and supervision during the period.
In the event that the EVN proposes a price increase within the range of 5-10%, the EVN must report to the MoIT. Within 15 working days, the ministry, in turn, must provide the EVN with an answer.
If the EVN suggests a price hike exceeding 10%, it becomes the responsibility of the MoIT to collaborate with other ministries and government agencies on a report, which must then be submitted to the central government and the Prime Minister for evaluation.
Economists have long suggested that shortening the time for price adjustments is a necessary preparation step towards a competitive electricity market.
Source: VnExpress