Pressure to increase electricity prices

To reduce monthly electricity consumption, Forward Electric Joint Stock Company uses many energy-saving devices.

The Government has just decided to increase the average retail electricity price. This is information that many people are interested in because electricity price is one of many important factors affecting production and business of units, enterprises and people's lives.

The storm is not over yet, difficulties are coming again

Having just gone through a difficult time due to the Covid-19 pandemic, businesses and people may soon face new difficulties due to increased electricity prices.

Tan Phat Tape Company Limited in Ngoc Chau Ward (Hai Duong City) specializes in the production of plastic packaging and adhesive tape with a production line that mainly uses electricity. According to the company's statistics, on average, the company consumes nearly 70,000 kWh per month, equivalent to about 140 million VND in electricity, an increase of about 40% compared to the second quarter of 2022. Meanwhile, the company is experiencing a significant reduction in orders, especially orders exported abroad because partners are still heavily affected by the pandemic. Moreover, according to regulations, businesses must increase wages for employees, making this company even more burdened. "The company has just recovered a little after 2 years of being affected by the pandemic, but has continuously encountered difficulties due to rising gasoline prices and increasing wages for employees. Now, if the electricity price continues to increase, it will create more pressure on the company," said Mr. Pham Ngoc Ninh, Deputy Director of the company.

Sharing the same pressure if electricity prices increase, Forward Electric Joint Stock Company (in Gia Loc town) is also struggling with the "problem" of ensuring profits in times of rising prices. The unit specializes in manufacturing industrial electrical cabinets, civil electrical cabinets, control cabinets used in factories and businesses. Therefore, the unit's production equipment system mainly uses electricity such as cutting machines, welding machines, paint booths, automatic drying booths and lighting systems in factories. Every month, the unit spends 30 - 50 million VND to pay for electricity. With the new retail price frame increasing according to the Government's direction, this cost will certainly increase, more or less affecting the unit's operations. "Increasing electricity prices will also increase costs, while the selling price of products is already competitive, we cannot arbitrarily increase prices", Mr. Ngo Van Quang, Sales Director of the company shared.

Not only businesses are under pressure, people are also worried about the upcoming increase in electricity prices. Doan Thi Doan's family (in lane 55, Thanh Binh street, Hai Duong city) has to pay about 700,000 - 1 million VND for electricity each month, and even more during peak months. Each month, electricity bills usually account for more than 10% of the total living expenses of the family. "I am a worker, my income is often irregular. Recently, the increase in gasoline prices has led to an increase in the prices of many other things. In the future, if the electricity price increases, no matter how little or much, we will definitely be affected," said Doan.

Rising electricity prices will put more pressure on Tan Phat Tape Company Limited.

Need to calculate reasonable electricity price increase plan

According to the new decision, the price range of the minimum average retail electricity price is 1,826.22 VND/kWh (excluding VAT); the maximum average retail electricity price is 2,444.09 VND/kWh. Compared to the old range most recently adjusted in 2019, the minimum price increased by 220.03 VND/kWh (equivalent to an increase of 13.7%), the maximum price increased by 537.67 VND/kWh (equivalent to an increase of 28.2%).

In fact, the average retail electricity price frame is the floor and ceiling for the Government to firmly regulate the average retail electricity price. Increasing the average retail electricity price frame does not immediately change the retail electricity price for living, production and business at this time.

It is known that electricity prices have not increased for 4 years, while coal and gasoline prices have continuously increased sharply over the past year. According to the 2022 report of Vietnam Electricity Group, the unit has been suffering heavy losses because the selling price of electricity is much lower than the cost of electricity production. Therefore, increasing electricity prices will help the electricity industry reduce difficulties and electricity customers will have to proactively implement electricity saving measures.

Forward Electric Joint Stock Company has proactively used energy-saving devices. For example, for paint booths and automatic drying booths, the company has set a timer. After the time is up, the machine will automatically turn off to reduce the waiting time of the machine, without consuming electricity. Laser cutting machines help cut iron and aluminum faster and more effectively without using much electricity. The company also takes advantage of doing many jobs during off-peak hours to limit electricity consumption...

Many businesses also expressed their sympathy with the electricity industry when production costs increased, and at the same time, they would raise awareness of saving electricity. "We hope that relevant levels and sectors can divide the roadmap for increasing electricity prices to minimize the impact on production and business for businesses," said Mr. Pham Ngoc Ninh.

TUAN LINH