VietNamNet Bridge reported that the Electricity of Vietnam unexpectedly announced that the electricity price increases by 5% as of December 20th 2011.

The information has surprised everyone, including economists. No one thought before that the electricity price would be raised further in 2011, because ministries and branches all affirmed that any moves to adjust the electricity prices need to be taken in a cautious way in order to avoid shocks to the national economy.

Mr Pham Chi Cuong, chair of the Vietnam Steel Association VSA, said that the 5% electricity price increase would not have big direct impacts on steel manufacturers, who have been using modern technologies which allows to cut down the energy consumption.

He said “Currently, the electricity price just accounts for 7% of the production cost in making ingot steel and 1% in making other kinds of steel. However, what worries steel manufacturer most is that suppliers would reason the electricity price increases to raise the input material prices. If so, the production costs would be increasing sharply.”

(Sourced from www.vietnamnet.vn)