Affected subjects
In the third draft of the Decree amending and supplementing Decree 72/2025 on the mechanism and time for adjusting average retail electricity prices, the Ministry of Industry and Trade proposed to add a provision allowing Vietnam Electricity Group (EVN) to calculate other previously fully accounted expenses into average retail electricity prices.
This creates a legal basis for EVN to recover losses from previous years through adjusting retail electricity prices in the following years.
The September 2025 Market perspective Report of Dragon Capital Securities (VDSC) assessed that the Ministry of Industry and Trade is gradually shifting the method of determining retail electricity prices towards marketization and transparency, to reflect the actual cost of electricity generation and related costs in the electricity market.
The Ministry of Industry and Trade has also allowed EVN to increase electricity prices to a maximum of 5%, 3 times a year, without the approval of the Ministry of Industry and Trade. These adjustments have helped EVN improve business results and operate profitably again in 2024.
Currently, EVN is proposing to adjust retail electricity prices with 2 proposals (1) reallocate the Group's accumulated loss of VND45 trillion in 2022 and 2023 into retail electricity prices and (2) apply a two-component electricity price mechanism. These proposals will increase electricity usage costs (especially for industrial and manufacturing customers) but will also create more financial space for EVN to invest in developing new projects" - VDSC experts assessed.
EVN cannot bear the deficit forever
According to Mr. Trinh Quoc Vu - Deputy Director of the Electricity Department (Ministry of Industry and Trade), regarding the proposal to allow EVN to calculate other costs that have not been fully accounted for in electricity prices, it is necessary to clarify which reasonable and valid costs of Vietnam Electricity Group have not been accounted for and fully calculated in retail electricity prices.
The geopolitical conflict between Russia and Ukraine in 2022 and 2023 caused a lot of fluctuations in the world's primary energy market, specifically the unusual price increase. The huge fluctuations in primary fuel will be reflected in the power generation price through the power purchase contract adjusted according to the input fuel price. By 2023, the fuel price level is better than in 2022 but is still much higher than the general level of fuel prices in 2021.
"This leads to a huge increase in EVN's electricity purchase costs from power sources, especially from sources using fossil energy, including coal, gas and oil," said Mr. Trinh Quoc Vu.
According to the Deputy Director of the Electricity Department, based on the regulations on electricity prices, reasonable and valid costs in the cost structure of EVN input electricity prices will be included in the average retail electricity price for adjustment.
However, in the context that in 2022 we have just emerged from the COVID-19 pandemic, the economy and sectors need stability to recover after the pandemic, we have decided not to adjust electricity prices. In 2022, there was no single increase in electricity prices. In 2023, there were 2 increases but losses. At the end of 2023, EVN suffered a deficit due to costs, we are familiar with calling it an accumulated loss, up to about 50,000 billion VND.
That is not including the difference of about VND 21,800 billion in electricity exchange rates that EVN must pay to power generation units under power purchase contracts. That is, due to the exchange rate slide between the VND domestic currency and foreign currencies, power generation units have to borrow capital from foreign credit institutions to invest in power sources and EVN must be responsible for paying in power purchase contracts. That creates a deficit between revenue and total cost of electricity price of Vietnam Electricity Group.
"Not sooner or later, we must let businesses account for and calculate the electricity price correctly, because EVN cannot bear it forever" - Mr. Trinh Quoc Vu emphasized.
