Enterprises reduce profits
Vietnam Electricity Group (EVN) announced an adjustment to the average retail electricity price with an increase of 4.8% from May 10. From 2023 to present, EVN has adjusted electricity prices 4 times and implemented them under its authority, with an increase of more than 17%. The increase in electricity prices is creating significant pressure on the production and business activities of domestic enterprises, especially in the context of difficult economy and uncertainty in world trade.
Talking with Lao Dong, Mr. Dao Hong Quan - Chairman of the Trade Union of Thanh Hien Ha Nam Company Limited commented that when electricity prices increase, it will greatly affect the production costs of the enterprise. With a difficult export situation, businesses are competing fiercely to maintain market share. Enterprises cannot easily increase selling prices because they may lose orders. The increase in electricity prices has caused production costs to increase, but businesses have to accept reduced profits, not increase prices.
"As a heavy industrial enterprise, we work 24/7, and production activities require a lot of electricity. Every month we pay about 700 million VND in electricity bills, not to mention hot times, so increasing by 4.8% will also have a significant impact, Mr. Quan informed.
In the production activities of enterprises, unusual power outages will greatly affect production progress and orders, especially for export orders with fixed delivery times. This can lead to fines and affect the reputation of the business.
Increasing electricity prices requires a clear roadmap and specific plan
According to experts, adjusting electricity prices is necessary if the current price is not enough to ensure resource for reinvestment in the electricity industry. Especially in the context of limited supply and high input costs, especially renewable energy sources, imported coal power sources or imported electricity sources with cheap prices. However, adjusting electricity prices must have a reasonable roadmap to avoid creating more burdens for people and businesses.
Mr. Dao Hong Quan suggested that EVN should have a clear roadmap for increasing electricity prices and a specific plan so that businesses have time to prepare and believe that if the increase in electricity prices is reasonable and is implemented at the same time as a commitment to a stable supply and not a sudden power outage, it can be accepted.
Sharing the same view, Mr. Trinh Duc Kien - Deputy Director of Ke Go Company Limited - affirmed that the increase in electricity prices will certainly affect the production costs of enterprises, but what businesses are most concerned about is the unstable supply of electricity and the risk of sudden power outages, without any warning plan.
No business wants production costs to increase at this time. However, if the increase in electricity prices has a reasonable roadmap and there are specific commitments to ensure stable electricity supply, businesses can accompany the electricity industry. A stable operating power system with the capacity to meet growth needs will bring long-term benefits, instead of maintaining low prices but lacking investment, leading to repeated power outages, Mr. Kien shared.
Electricity prices increase further, it is unclear when EVN will lose out
At the press conference on 9.5, the financial situation, the exchange rate losses have not been specifically information after EVN after the electricity price is adjusted. However, according to the results of the electricity production and business cost of the Ministry of Industry and Trade announced at the end of 2024, EVN's total production costs in 2023 were more than VND 528,600 billion, equivalent to production price of VND 2,088.9/kWh.
In 2024, EVN's business results were flat but there were still tens of thousands of billions of VND in losses from 2022 and 2023. This loss does not include more than VND18,000 billion in exchange rate difference of 5-year suspended power purchase and sale contracts (2019-2023).
