Ministry proposes new electricity tariffs hinh anh 1Engineers inspect Thai Binh thermal power plant in the northern province of Thai Binh. (Illustrative image. Source: VNA)

Hanoi (VNA) -
The Ministry of Industry and Trade has proposed a new retail electricity tariff which is divided into five rates instead of six. In this option, 98.2 percent of households in the country would see no increase or even lower power bills.

Several options for calculating power bills of households were recently raised for comments, but the ministry opted for one that divided household electricity tariffs into five ranges: range 1 for kWh from 0 to 100 (1,549 VND), range 2 from 101 to 200 (1,878 VND), range 3 from 201 to 400 (2,431 VND), range 4 from 401 to 700 (2,701 VND) and range 5 from 701 upwards (2,878 VND).

In comparison, the electricity tariff is currently divided into six ranges: range 1 from kWh 0 to 50 (1,549 VND), range 2 from 51 to 100 (1,600 VND), range 3 from 100 to 200 (1,853 VND), range 4 from 201 to 300 (2,340 VND), range 5 from 301 to 400 (2,615 VND) and range 6 from 401 upwards (2,701 VND).

In this option, the ministry said that the retail price for range 5 was two times higher than that of range 1 and the gap was reasonable, citing the gaps in other countries like the US, the Republic of Korea, Thailand and Laos ranged from 1.65 to three times.

The ministry added that the new retail electricity tariff following this option would encourage electricity saving, while preventing unexpected increases in the sums paid for power bills by households in peak months.

According to the ministry, with this option, households who consumed less than 700kWh per month (accounting for 98.2 percent of the total number of households in the country) would see no increase or even lower power bills.

Other households would see an average increase of 29,000 VND in their monthly electricity bills, equivalent to 1.1 percent of the sum paid for power bills.

The ministry also proposed other options which divided retail electricity tariffs into one, three and four ranges.

Statistics of Vietnam Electricity showed that households using less than 300kWh per month totalled more than 22 million, accounting for 72.6 percent of the total number of households in the country and 60 percent of the power consumption.

About 1.2 million households used from 400kWh to less than 700kWh. As many as 456,000 households used more than 701kWh per month, accounting for 13 percent of power consumption.

In the option that had only one range for retail electricity tariff proposed at 1,897 VND per kWh, 18.6 million households using 0-200kWh per month would see their power bills increase by between 17,000 VND and 36,000 VND while households using more power would see decreases in power bills. The ministry said that this option would not encourage power saving.

In the options that divided electricity tariff into three and four ranges, millions of households would see higher power bills.

Vietnam was gearing up preparations to launch a competitive retail market in 2021. The country expected to have a fully competitive retail market from 2023./.