Vietnam's state-owned utility EVN has raised the power tariff to help cushion increases in power generation cost.

EVN has increased the average electricity price by 4.8pc to 2,204.0655/kWh Vietnamese dong/kWh ($0.085/kWh), excluding value-added tax. The price rise was effective from 10 May, EVN said.

Coal, gas, oil, renewable energy are "high-cost power sources," comprising about 75pc of the country's generation, EVN said. The price increase could potentially give the utility some headroom to offset the increase in power generation costs, while also helping EVN to continue importing coal for power generation and absorb the impact of foreign exchange fluctuations.

The increase in power tariffs by EVN comes after a Vietnamese federal government gave EVN some freedom to raise prices by up to 5pc from current average retail prices, although the utility has to inform the ministry of industry and trade about the decision.

The policy to liberalise retail electricity pricing came as the southeast Asian country continued to ramp up imports to boost generation and meet rising power demand.

The country's coal imports rose from a year earlier to 7.16mn t in April, the highest level in 22 months, up from about 5.9mn t a year earlier and 6.52mn t in March, according to customs data. Imports reached 24.45mn t in January-April, up from 20.56mn t a year earlier, the customs data show. The data do not differentiate between coking and thermal coal.

The country's commercial electricity generation could grow by 12pc or by 33.6TWh in 2025 from a year earlier, EVN said, adding that the uptick in generation would be supported by higher mobilisation of power from thermal power stations, including the imported-coal-fired utilities.

The utility said it has implemented cost reduction and savings measures, and aims to save at least 10pc of the regular and major repair costs. At the same time, Vietnam would provide support to poor household to cushion the impact of the increase in power prices, EVN said.

By Saurabh Chaturvedi