Vietnam hikes electricity floor price by nearly 14%

HANOI (Reuters) - Vietnam has raised the average floor price for retail electricity by 13.69%, the government said on Monday, a move that is expected to pave the way for state utility EVN to raise its prices.

The Southeast Asian country has sought to raise retail electricity prices to encourage investment in the power generation sector, but has also faced pressure to keep inflation under control.

The minimum average retail electricity price has been raised to 1,826.22 dong (7.78 cents) per kilowatt hour (kWh), excluding value added tax, the government said in a statement.

The cap on average retail electricity price has also been raised 28.2% to 2,444.09 dong per kWh, it added.

The Ministry of Industry and Trade last month asked EVN, the country's dominant electricity retailer, to submit a plan on raising electricity prices for 2023.

The ministry said in a statement an "adjustment" to retail electricity prices would help EVN to improve its balance sheet, adding the company made net loss of 31 trillion dong last year.

Vietnam aims to keep inflation below 4.5% this year. Its consumer prices in December rose 4.55% from a year earlier.

($1 = 23,475 dong)

(Reporting by Khanh Vu)