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

The electricity price list for households this time is expected to be the same as nearly 4 years ago, divided into 6 levels with increasing prices, the more you use the higher the price. This means that 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 and high prices

“Even at my house, I can never keep track of the electricity bill with the current 6 steps” - Mr. Nguyen Tien Thoa - Vice President and General Secretary of the Vietnam Valuation Association, commented on the Ministry of Industry and Trade asking for opinions on the structure of retail electricity prices.

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” of electricity will enjoy the cheapest price of 1,484 VND/kWh. Meanwhile, customers using 401 “kWh” or more will have to 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 is “aimed at encouraging 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 for household use.

Assessing the practical application over the past 3 years, the Ministry of Industry and Trade believes that applying household electricity prices in 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 the current 6-level household electricity price, which has been 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 yet reached real life.

Mr. Nguyen Tien Thoa, who used to hold the position of 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 relatively 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 on the electricity price list improvement project.

According to VNN