CHINA, the world's second-biggest energy consumer, may raise retail electricity prices to cover higher costs for generators and distributors, an official said.

Prices may increase by 0.025 yuan per kilowatt-hour, Zhang Zengchan, secretary general of China Ferroalloys Industry Association, said yesterday in Xiamen, citing discussions with government officials. He didn't say when prices will be raised.

China, fighting a sixth year of power shortages, lifted wholesale electricity tariffs twice and retail prices once this year. State Grid Corp of China, the distributor in 26 provinces, said on August 20 the government needs a system that allows retail and on-grid prices to rise at the same time because it is struggling to raise funds for its network, Bloomberg News said.

"The tariff hike will lead to higher costs for ferroalloy producers," Zhang said. "Though the impact of the increase won't be as big as prices of imported mineral ores."

China raised prices of electricity sold from utilities to distributors by 4.7 percent in July and 6 percent in August. The increases were aimed at helping power generators cope with rising coal costs, which reached a record 1,080 yuan a ton on July 23.

Huaneng Power International Inc, a unit of China's biggest power producer by capacity, and smaller rival Huadian Power International Corp reported first-half losses last month because of increasing fuel costs.