HANOI — Vietnam's Ministry of Industry and Trade proposed gradually passing nearly 45 trillion dong, equivalent to about US$1.8 billion, in accumulated losses of state-owned utility Vietnam Electricity (EVN) into future retail electricity prices paid by households and businesses. When the electricity system accumulates losses, the burden is transferred to consumers through administrative pricing adjustments.

EVN's financial position has deteriorated following global fuel price shocks and rising generation costs. For years, Hanoi maintained relatively low electricity prices to contain inflation, support exports, preserve social stability, and sustain GDP growth.

EVN retains dominant control over transmission infrastructure, grid management, and retail pricing mechanisms. Electricity consumers in Vietnam cannot freely choose providers and do not have meaningful influence over how prices are determined. Vietnam has partially opened the solar energy and independent power generation sectors to private investment.

Vietnam's electricity sector operates under a hybrid model in which risks are socialized and market competition is tightly controlled. Electricity prices are politically calibrated and are neither fully market-driven nor entirely subsidized. The sector remains only partially liberalized, with losses distributed across society when the system accumulates deficits.

Electricity is a core input for industries such as steel, electronics, chemicals, solar equipment, and industrial manufacturing. Vietnam operates under a centralized system in which state-owned enterprises remain closely tied to macroeconomic management and social stability objectives. The Vietnamese state remains reluctant to relinquish strong control over sectors considered strategically and politically sensitive.

Many developing economies struggle to liberalize strategic sectors without triggering social instability, and even advanced economies intervene heavily in energy markets during periods of crisis. In mature market economies, electricity price increases are typically accompanied by stronger independent regulators, greater financial transparency, more meaningful competition, and clearer accountability mechanisms.