NA Standing Committee discusses power tariff

Problems concerning electricity prices were the focus during the current session of the National Assembly, as members of the NA Standing Committee agreed that the Government should determine the average power tariff during discussions of Draft Amendments to Electricity Law.

As per the report submitted to the NA Standing Committee by the Industry and Trade Minister Vu Huy Hoang, the low average power tariff in recent years (currently VND1,300 per kilowatt-hour) had led to losses and discouraged other economic sectors from investing in the electricity sector.

Moreover, the current electricity price has not taken into account the constant changes in the market and other factors such as exchange rates or hydrographic conditions, Minister Hoang argued.

Thus he proposed that the draft amendment should stipulate many components to establish power prices, including transmission, distributing, wholesale, service prices and power regulating fees.

However, some deputies did not agree with the fees in the report by the Minister of Industry and Trade.

Electricity will remain a special commodity whose prices should be determined by the government, said Phung Quoc Hien, Chairman of the National Assembly for Finance and Budget.

 “Power is still controlled by the state, so the government should determine prices to avoid monopoly of price and profit,” said Hien who also remarked that “there seem to be too many prices and fees. Multiple layers of prices and fees will raise power prices”.

The head of the NA Committee for Finance and Budget, agreed that Vietnam's electricity prices were lower than those of other countries in the region, but he said that allowing the market to determine the price would conflict with the Draft Law on prices, which puts electricity on the price stabilization list.

Phan Trung Ly, head of the NA Legal Committee, said that without careful consideration, the Draft Amendments would lead to monopolization.

However, Minister Hoang said while the electricity industry was under restructuring the above-mentioned stipulations were unavoidable as EVN should only act as a power buyer and seller, while the electricity generating sector was attracting the participation of other players, including private businesses.”

The Minister of Industry and Trade explained, the power sector consists of many different aspects, from generating to transmitting power and there should be different prices and fees.

In response, NA Chairman Nguyen Sinh Hung said that the retail market could be determined by the providers and the Government would only be involved in certain cases, such as supporting low-income households or implementing other policies to encourage investments in the sector.

Related to the Draft Amendments to the Electricity Law for the development of electricity power industry, the NA Chairman stated that any policy had to comply with concrete  measures and the provincial People's Committee plans for electricity development from a five-year to a 10-year period to comply with the National Master Plan.

At present Electricity of Vietnam controls more than 57 per cent of electricity sources and 90 per cent of the retail market and Vietnam hopes to develop a fully competitive retail power market by 2022.

On the same day, the NA Standing Committee also discussed the Law on Advertising, stressing on the responsibilities of the party that carries advertisements, with regard to accuracy and content.

NA Standing Committee members also gave their opinion on the draft amendments to an ordinance for supporting veterans and their relatives.

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