The latest increase in electricity prices from July 1 is putting additional burden on small businesses.
Consumer prices may increase following electricity price rise
Electricity prices have risen to VND2,192/kWh (USD0.1/kWh), meaning that small businesses are trying to make as many savings as possible to mitigate the effect of the 5% price hike.
A tea shop on Nguyen Trai Street Hanoi, has dozens of fans operating at maximum capacity and sugar-cane squeezers being used continually to serve customers.
Owner Tran Thi Thanh said, “Now I have to pay an extra of VND50-70,000 (USD2.4-3.3) for electricity bill each month. I can deal with this easily. But what I am afraid is that sugar cane, ice, and other products will increase as their production costs grow following the electricity price hike. That’s the real issue.”
Ngo Van Quang, the owner of a diner on Khuong Trung Street said, “After previous power price hikes I changed to power-saving appliances, but I don’t know what I should do to deal with the new price increase. Maybe I’ll move some tables out onto the pavement to save electricity. Raising prices is impossible because I may lose my customers, but the price increase will surely affect prices of agricultural products I buy everyday.”
Most of the interviewed shopkeepers said they wouldn’t raise prices because the price increase wasn’t that much, and given already slow sales.
Le Thi Thang, a clothes store owner on Tran Duy Hung Street said with this new power price, she’d have to pay an extra VND150,000 in utility bills.
That hike isn’t much but her shop is already facing difficulties despite her sales promotions as fewer consumers are coming to her shop. She will be forced to dismiss one shop assistant.
Nguyen Kien, a laundry shop owner on Kim Ma Street said, “Our shop uses lots of electrical appliances, so I thought of raising prices. However, our service isn’t that essential, rising prices may prevent customers from using laundry services. We have to offer competitive prices to retain customers.”
An ironmonger on Trieu Khuc Street decided to raise his prices due to his heavy reliance on electrical appliances.
“If I don’t raise price, I may suffer losses, but it’s really risky as the construction industry is so flat”, the shop owner said.
According to EVN, this power price hike was carefully considered to avoid affecting small businesses, but a 5% price hike will have a knock-on effect on the market. It is predicted that business owners will face difficulties due to rising production costs but dare not to rise selling price.
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