New electricity price frame: Using over 400 kWh, price doubles

The household electricity price list this time is expected to remain the same as nearly 4 years ago, divided into 6 levels with increasing prices, the more you use the higher the price. That means customers using electricity at the highest level will have to pay 1.74 times more expensive than customers at the lowest level. That is nearly double the average electricity price.

No change in high electricity usage, high prices

“Even at my house, I can never keep track of the electricity bill with the current 6 steps,” said Mr. Nguyen Tien Thoa, Vice President and General Secretary of the Vietnam Valuation Association, commenting on the Ministry of Industry and Trade’s consultation on the structure of the retail electricity price list.

In this draft, the retail electricity price list for household electricity customers is still divided into 6 levels, with increasing prices, the more you use, the higher the price. This price list has been applied since the beginning of 2014 until now, with the average retail electricity price being 1,622.01 VND/kWh.

Customers using 0-50 “kWh” enjoy the cheapest price of 1,484 VND/kWh. Meanwhile, customers using 401 “kWh” or more must pay a price nearly twice as high as the average retail price of electricity, up to 2,587 VND/kWh.

This means that electricity customers at the highest level have to pay up to 1.74 times higher prices than customers at the lowest level.

Current retail price list for household electricity.

The Ministry of Industry and Trade explained that this price list “aims to encourage the economical and efficient use of electricity”. In addition, this is also based on the experience of countries around the world as well as in the ASEAN region such as Japan, Korea, Hong Kong, South Africa, Indonesia, Thailand, and Malaysia, which all apply a tiered electricity price.

Assessing the practical application over the past 3 years, the Ministry of Industry and Trade believes that the application of household electricity prices according to levels is "simple in application" but still achieves the goal of encouraging "saving and efficient use of electricity".

Therefore, in the draft decision, the Ministry of Industry and Trade continues to propose designing household electricity prices in 6 levels as currently applied since 2014.

According to experts, after several years the price list has remained the same while people's lives have changed a lot, so the price list built by the Ministry of Industry and Trade has not been able to reach real life.

Mr. Nguyen Tien Thoa, who used to be the Director of the Price Management Department (Ministry of Finance), said: "Now, even poor households still have very few households using less than 50 kWh. Life has changed, there are more electrical appliances... very different, so we have to calculate how the majority of people can enjoy a more reasonable price."

In the immediate future, this expert recommends improving the household electricity price list to keep up with changes in life, ensuring easier monitoring for consumers, and clearer management of the electricity metering industry.

In fact, in March 2015, after the 6-tier retail electricity price list was put into effect, many controversies broke out. At that time, the Ministry of Industry and Trade and Vietnam Electricity Group had to organize workshops across the 3 regions to collect comments for the electricity price list improvement project.

According to VNN