CaliToday (07/9/2025): Vietnam's Ministry of Industry and Trade (MOIT) has announced that a potential electricity price hike of 2-5% is under consideration, a move aimed at offsetting the massive financial losses incurred by the state-run utility, Vietnam Electricity (EVN). The proposal, however, has been met with significant public concern, reigniting a heated debate over the corporation's efficiency and the direct impact on consumers already grappling with inflation.
According to the ministry's statement, the "slight" price adjustment would be necessary if the recent, staggering losses of nearly 45,000 billion Vietnamese Dong (approximately $1.8 billion USD) are incorporated into the official electricity pricing structure. Officials argue this step is crucial for balancing EVN's finances and ensuring national energy security.
The root of EVN's deficit lies in the sharp divergence between soaring global fuel prices for power generation and the state-controlled domestic electricity tariffs, which have been kept low to maintain social stability and control inflation. This has forced EVN to sell electricity at a price below its production cost, leading to unsustainable financial pressure.
However, the proposal for consumers to shoulder the burden through higher prices has sparked widespread discontent. Public frustration stems from several key areas:
Existing Consumer Costs: Vietnamese citizens already pay a 10% Value-Added Tax (VAT) on their electricity bills. Furthermore, there is a common perception that consumers are indirectly bearing the cost of the industry's operational inefficiencies, such as the rate of power loss during transmission—a factor that contributes to EVN's overall expenses.
Calls for Transparency: The recurring cycle of massive losses followed by proposed price hikes has led to public demands for greater transparency in EVN's operations and expenditures. Many citizens question whether the losses are solely due to external market forces or if internal mismanagement and a lack of efficiency are also to blame.
Inflationary Pressure: Electricity is a fundamental input cost for the entire economy. Critics of the proposed hike warn that even a minor increase will have a significant ripple effect, driving up production costs for businesses, which will then be passed on to consumers. This would add further pressure to the rising cost of living and could fuel broader inflation, impacting household budgets and the nation's economic recovery.
The government now faces a difficult balancing act: stabilizing the financial health of its national power utility without overburdening its citizens and jeopardizing its inflation-control targets. The final decision on the price increase is pending and will be closely watched by millions of households and businesses across the country.
