VNEconomyNews.com - The government may continue to regulate power prices instead of handing over the entire decision to the state-owned Electricity of Vietnam Group (EVN).
According to the draft Law on Prices, which will be delivered at the National Assembly on May 28, electricity production is defined as key service which dramatically affects production and people’s lives. Therefore, the government will continue to regulate prices.
As a result, the government may decide prices for power transmission and support services as these are state-monopolies.
The government could only set a framework for power generation, wholesale and retail prices and allow power companies to decide detailed prices.
Regarding power generation prices, the government is speeding up the building of a competitive power generation market which is expected to start operation in 2012, along with giving power companies more autonomy to decide their wholesale power prices in order to increase their competitiveness.
The setting of framework for power generation, wholesale and retail prices are expected to prevent power companies from colluding with one another in order to drive up prices, negatively affecting production and people’s lives.
Concerning the country’s average retail power prices, the draft law said that the current power pricing mechanism is no longer suitable as it has remained unable to fluctuate based on input costs.
In order to improve the situation, the draft law suggested that the government decide the framework for average retail power prices and retail power pricing. The Ministry of Industry and Trade should be responsible for defining retail power prices for particular groups of consumers.