Lower power prices for hospitality industry need to be offset: EVN

By Anh Minh   July 11, 2018 | 05:38 pm PT
Lower power prices for hospitality industry need to be offset: EVN
Electric workers in Hanoi. Photo by VnExpress/Thu Ngan
A proposal to reduce power prices for the hospitality industry by 37 percent per unit has drawn a counter-proposal to increase prices for the production sector.

The Ministry of Trade and Industry (MOIT) is inviting feedback from other government agencies and the general public on a draft proposal that would apply production sector power prices to the hospitality industry.

Production sector power prices are significantly lower than those charged for non-production sectors like the services industry.

In response, Vietnam Electricity (EVN), the nation’s power utility, has said that the losses incurred as a result of this price reduction for the hospitality industry should be compensated with a five-percent increase in prices for non-peak hour consumption by the production sector.

EVN estimates that it would suffer losses of VND2.6 trillion (based on projected electricity consumption in 2018) if the MOIT’s proposal is passed.  

Hospitality businesses (hotels, resorts, villas, home stays, etc.) currently pay between VND1,256-VND4,061 per kilowatt hour. 

If they only have to pay power prices that apply to the production sector, the unit price can go down by as much as 37 percent.

While this move aims to help businesses in the hospitality industry and boost tourism, other ministries and departments have urged caution.

They have said that the MOIT should fully study and evaluate prospective outcomes before finalizing its proposal. 

The Ministry of Finance has recommended that MOIT should carefully study the power rate for non-production sectors and adjust the same for the production sector in a way that encourages electricity consumption during off-peak hours and reduces it during peak hours.

A representative from the Vietnam Association of Small and Medium Enterprises has also advised caution, saying higher electricity prices can exert inflationary pressures. 

go to top