In the dossier sent to the Ministry of Justice for appraisal of the draft Decision of the Prime Minister regulating the structure of retail electricity prices, the Ministry of Industry and Trade proposed to improve the structure of retail electricity prices for daily life, shortening from 6 levels to 5 levels.
Accordingly, the 5 new electricity price calculation steps are expected to include step 1 being the first 100kWh; step 2 being the next 101-200kWh; step 3 being the next 201-400kWh; step 4 being the next 401-700kWh and step 5 from 701kWh and above.
With this proposed plan, the lowest price for households is 100kWh or less, instead of 50kWh as at present, and the highest price is 701kWh or more. The ladder electricity price structure is calculated based on the average retail electricity price (VND2,006.79/kWh) at 90% (level 1), 108% (level 2), 136% (level 3), 162% (level 4) and 180% (level 5).
Thus, the lowest price is level 1, which remains at 1,893 VND/kWh, and the highest is level 5, which is 3,786 VND/kWh, excluding VAT.
According to experts, shortening the ladder will make it easier for consumers to understand and track their electricity consumption, while reducing the complexity of calculating monthly bills. Higher electricity prices at higher usage levels will encourage households to conserve electricity, thereby reducing pressure on the grid and saving costs for both consumers and suppliers.
This change could be the first step towards a more reasonable electricity pricing system, in line with the roadmap for developing a competitive electricity market in the future.
Speaking with Lao Dong, Associate Professor Dr. Dinh Trong Thinh - an economic expert - assessed that shortening the electricity price ladder from 6 to 5 levels is reasonable, because it helps simplify the price list and makes it easier for people to understand.
The lowest tier is also adjusted to be closer to the actual usage of many current electricity consumers, when usage of 50kWh or less is very rare. This improvement is more suitable to actual needs.
According to Associate Professor Dr. Dinh Trong Thinh, reducing the number of electricity price levels is absolutely necessary. However, reducing from 6 to 5 levels may not be enough and a 3-level option should be considered.
"Although reducing the electricity price ladder has been discussed for many years, the most important thing is that the calculation of the steps must be appropriate and transparent. In the immediate future, it is necessary to maintain the electricity price ladder structure, but in the long term, there needs to be fundamental changes, towards implementing the competitive electricity market roadmap," Mr. Thinh suggested.
