In a report sent to the government on draft amendments to Decision No. 24/2017 on the structure of adjustments to the average retail electricity price, the Ministry of Industry and Trade (MoIT) said it has thoroughly reviewed and evaluated the draft and added supplementations.

Its draft added proposals on cases where the Prime Minister or the government call for research and plans to help reduce electricity prices in a short period of time while ensuring macro-economic stability.

Accordingly, MoIT retained the provision whereby previously unaccounted expenses such as differences in exchange rates should be included in electricity prices.

The time between adjustments to the electricity price is expected to be shortened from every six months to every three months. This means that, each year, there will be four changes made and prices will be updated quarterly based on electricity generation costs.

The proposed average electricity retail price will be increased or decreased within specific margins. Specifically, when input expenses in various stages, such as power generation, transmission, or distribution, cause the electricity price to decrease by more than 1 per cent, Electricity of Vietnam (EVN) has the responsibility to lower selling prices accordingly.

It is to prepare documents to report to the MoIT and the Ministry of Finance (MoF) to supervise and inspect all changes.

Conversely, when electricity prices rise by more than 3 per cent, EVN is allowed to increase its selling prices accordingly. In cases where the average selling prices need to be increased by more than 10 per cent, potentially affecting the macro-economy, it is to preside over, inspect, and review such changes in consultation with the MoF and other relevant authorities.

The draft also specifies that, in certain cases, the MoIT will request that EVN engage independent consultants to inspect reports on electricity generating expenses and other reports of member units.

The MoIT also amended certain provisions regarding problems relating to the management of electricity prices, in accordance with legal provisions and the working regulations of the government.

Regarding the profit norm in electricity prices, the MoIT said it will not make specific regulations on determining this. It also said it has reviewed regulations and comments from the Deputy Prime Minister and from MoF.

Regarding presiding over and coordinating operating electricity prices, the MoIT is the agency in charge of inspection and review. The MoF, meanwhile, has responsibility for coordination in terms of being the State management agency on prices.

The MoIT also proposed that other ministries and agencies take part in this process, depending on their duties and mandates.

It will, however, maintain responsibility for the State management of electricity and electricity use, including prices. The MoIT will guide EVN in calculating the average electricity selling price, implementing electricity price adjustments, and presiding over inspection and supervision.