There will be a new tiered retail electricity price list later this year.

According to Mr. Nguyen Anh Tuan - Director of the Electricity Regulatory Authority (Ministry of Industry and Trade), the new step-by-step electricity price structure for residential customers is being researched by a consulting company and will be completed in September.

"The new retail electricity price list is expected to be available in October. After that, we will consult with ministries, sectors and people before submitting it to the Prime Minister for consideration and decision at the end of this year," Mr. Tuan said at a meeting on key energy projects of the Ministry of Industry and Trade.

The Director of the Electricity Regulatory Authority affirmed that this time the ladder electricity price structure will draw on experience from previous constructions (in 2015), international experience and be close to actual electricity usage as well as reduce cross-subsidy among consumers.

Minister of Industry and Trade Tran Tuan Anh requested the Electricity Regulatory Authority to "ensure the scheduled time to collect opinions on the new tiered electricity price structure in October".

"The 6-step electricity price list from the previous period has not been adjusted appropriately. This is a big lesson and our responsibility for not being proactive and following real life to make timely adjustments, leading to recent public outrage," said Mr. Tuan Anh.

From March 20, the average retail electricity price increased by 8.36%, to VND1,864.44 per kWh (excluding VAT). According to the retail electricity price list of Decision 24/2014, the lowest retail electricity price for households is VND1,678 per kWh and the highest is VND2,927 per kWh. These prices do not include VAT. The increase in the average retail electricity price and the maintenance of the 6-step retail electricity price list for households are part of the reasons for the sharp increase in household electricity bills in the following months.

Chairman of the Vietnam Energy Association Tran Viet Ngai said that the progressive price schedule is being applied by most countries because electricity is a special commodity, production and consumption are not at the same time, cannot be stored, so it needs to be used economically. However, in Vietnam, after 5 years of applying the 6-step retail electricity price schedule according to Decision 24, it is no longer suitable for people's lives and electricity market development and needs to be recalculated to come up with a new plan.

Reducing the number of steps or increasing or dividing the number of steps to closely follow the needs of each electricity user, Mr. Ngai said, needs to be carefully calculated and still ensure the principle that the more electricity is used, the more money must be paid for the higher steps.

He also noted that the structure of retail electricity prices needs to pay attention to factors affecting the poor, who currently account for a very large proportion of electricity use. According to the current policy, poor households are supported with electricity for 30 kWh at the first level.

In fact, in early 2015, the Ministry of Industry and Trade proposed to consult on the progressive electricity price list for revision after more than a year of application. At that time, the draft proposed 3 options for improving the retail electricity price list for household use. One was to maintain the current 6 levels. Two was to stipulate a single level of household electricity price list (uniform price). Three was to shorten the household electricity price list from 6 levels to 3 levels (or 4 levels) according to 5 scenarios. However, after much consideration, the 6-level progressive price list is still applied to this day.