Hanoi (VNA) - Deputy Minister ofIndustry and Trade Do Thang Hai said recently the ministry would consider increasingthe price of electricity this year.

The hike would be implemented at an appropriate time and the prices ofessential items would gradually be adjusted based on the market.

The ministry had envisaged four scenarios for power price schemes this year,and would submit them to the Government’s Price Management Committee.

Nguyen Anh Tuan, head of the ministry’s Electricity Regulatory Authority, saidthose scenarios were based on the predicted growth rates of electric energydemand and the volume of water received by hydropower plants.

In all scenarios, the total electricity generated from coal-powered thermalplants would increase by 116 million kWh, putting pressure on EVN to hike powertariffs.

The country’s annual growth in electricity demand is above 10 percent and evenhigher in some areas.

Vietnam still relies largely on hydropower and thermal power plants for itselectricity needs. Thermal plants are expected to account for over 48 percentof the power production this year.

An EVN official, who asked not to be named, said while the corporation wascapable of supplying enough electricity, pricing was a big problem.

According the official, the output this year is estimated to be 242-243.5billion kWh and the ministry could mobilise another 2-7 billion kWh fromdiesel-powered sources at high prices. But its main mission is to ensuresufficient power supply.

Electricity from oil costs nearly 5,000 VND (0.2 USD) per KWh to produce but itis sold to households for just 1,720 VND (0.123 USD), which causes a big lossto producers.

Another factor that could affect electricity prices this year is a 5 percentincrease in coal prices that came into effect late last year.

Analysts said coal accounted for a significant proportion of electricityproduction cost, and so this would exert huge pressure on the power sector.

Deputy Prime Minister Vuong Dinh Hue, head of the Steering Committee for PriceManagement, said power prices should be adjusted in such a way that it isappealing enough to attract investments in electricity production.

But he warned that costs should be controlled by relevant ministries in atransparent manner so that higher tariffs would not come as too heavy a burdenon businesses and other consumers.-VNA