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Study on the Impacts of Electricity TariffIncrease on the National Economy of Vietnam

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  • Nguyen Quoc Khanh
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    Abstract

    The electricity price in Vietnam in 2011 was around 6 US ¢/kWh which is lower than the Long Run Marginal Cost (LRMC) of 9.5 US ¢/kWh. This low price discourages energy productivity enhancement and affects energy supply security. Thus, the Government of Vietnam plans to increase the electricity tariff. This study examines the impacts of increasing electricity tariff to the LRMC on prices of consumer goods and services and the likely distribution impacts by household income quintiles using a static Input-Output approach. The study found that such an increase would drive up the prices of all other products. The price impact, however, is not large. The distribution impact by household income quintiles is also not large. Although the impact is not large, it would be socially difficult to implement this increase at once, particularly given that Vietnam is facing high inflation rates. A roadmap for electricity tariff increase is thus discussed. continuing economic competitiveness in the region.

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  • Yanrui Wu & Xunpeng Shi & Fukunari Kimura & Yu Sheng & Youngho Chang & Yanfei Li & Sun Xuegong & Guo Liyan & Zeng Zheng & Daisy Shen & Qing Yang & Kongchheng Poch & Savong Tuy & Sekar Utami Setiastuti, . "Energy Market Integration in East Asia: Theories, Electricity Sector and Subsidies," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2011-rpr-17 edited by Yanrui Wu & Xunpeng Shi & Fukunari Kimura, August.
    This item is provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Chapters with number 2011-rpr-17-10.

    Handle: RePEc:era:chaptr:2011-rpr-17-10

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    1. Thi Anh Tuyet, Nguyen & Ishihara, Keiichi N., 2006. "Analysis of changing hidden energy flow in Vietnam," Energy Policy, Elsevier, vol. 34(14), pages 1883-1888, September.
    2. Tiwari, Piyush, 2000. "An analysis of sectoral energy intensity in India," Energy Policy, Elsevier, vol. 28(11), pages 771-778, September.
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