The electricity single-price mechanism designed by the Electricity Regulatory Authority (ERA) under the Ministry of Industry and Trade (MOIT) has raised controversy.

Explaining the MOIT’s tentative plan to apply the single-price mechanism at the same time with the multi-tiered mechanism, Deputy Minister of MOIT Hoang Quoc Vuong said MOIT wants to better serve electricity users. He said in general sellers offer more than one option to buyers.

IKEA, the wooden furniture company, for example, offers two options. Customers can either buy ready-assembled products at higher prices, or buy separate parts to assemble products themselves at lower prices.

However, Vuong noted that the suggested solution did not have a high consensus among the public.

ERA’s head Nguyen Anh Tuan admitted that the single pricing mechanism gives one more option to consumers, but it does not encourage people to practice thrift when using electricity.

ERA’s head Nguyen Anh Tuan admitted that the single pricing mechanism gives one more option to consumers, but it does not encourage people to practice thrift when using electricity.

Therefore, ERA believes that it would be better not to apply it, and In the immediate time, it will focus on working on the multi-level pricing mechanism. The mechanism needs some adjustments to become more reasonable.

Anh, in his speech closing the meeting on the draft of the Prime Minister’s decision on the electricity retail price structure on August 18, stressed that the current multi-tiered price mechanism, which comprises six price levels, for many reasons, still cannot satisfy electricity users. Therefore, it is the task of the ministry to re-design the mechanism.

He said the single pricing mechanism is ‘unreasonable’ for now. If only 2 percent of customers can benefit from the mechanism, it appears to be ineffective.

MOIT, after analyzing opinions from analysts and experts, found that the single price mechanism should only be applied in the future, when Vietnam has an electricity competitive retail market and has the necessary tools and legal framework to implement the state’s role in ensuring social security and support people in need.

At the meeting, Anh asked Vuong to instruct ERA to continue working on the options for electricity retail prices.

The electricity retail prices need to be designed in a way so as to observe the principles of ensuring social security for the poor, encouraging energy saving, ensuring energy security, and striving for sustainable development.

The working group on electricity price design and appraisal will have additional members from the State Capital Management Committee (SCMC) and MOLISA (Ministry of Labor, War Invalids and Social Affairs) to ensure transparency. 

Luong Bang

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