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Friday, June 14, 2024

Trade Ministry proposes new electricity pricing

The Saigon Times

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HCMC – The Ministry of Industry and Trade has proposed using four or five electricity price caps instead of the applicable six caps by lumping the lowest two together.

The lowest cap would be applied for households using less than 100 kWh, instead of 50 kWh. The floor and ceiling prices of electricity will be VND1,678/kWh and VND3,356/kWh (excluding VAT), respectively.

According to the Ministry of Industry and Trade, the six electricity caps since 2014 are no longer suitable for the current situation when the groups using below 50kWh/month have decreased and those using above 200kWh/month have surged.

This adjustment will fundamentally change the electricity retail price brackets and directly affect customers. The average retail price of electricity for the people will remain unchanged, but some groups of customers will receive a reduction in electricity bills and vice versa.

For example, a household using less than 270kWh/month will be charged in accordance with the third cap instead of the fourth cap. Their electricity bill will increase by 2.32-4.5% compared to the applicable price caps.

A household using 280-1,100kWh/month will receive a reduction of 2.47%-4.82%, while the bill of a household using above 1,100kWh/month will increase 3.87% on average.

Regarding poor households, the Ministry of Industry and Trade will still apply the support policy and keep the current electricity price in the range of 0-100 kWh.

With the increase in electricity prices (from VND1,549 to VND1,678), around VND42 billion will be added to the budget each year.

In addition to this plan, the Ministry of Industry and Trade also suggested calculating electricity prices with four caps. However, the electricity bills of households using 119-232 kWh/month and above 806 kWh/month will be increased by VND12,100/month.

According to the experts, this plan will not encourage people to save energy as effectively as the first one.

The electricity prices for production, business and civil services will also be changed and determined based on the voltage levels and the groups of customers. The prices will be unchanged during the normal and peak hours and increase during off-peak hours.

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