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New power pricing mechanism to be applied next year

The common retail power price is expected to be applied at the beginning of next year together with the current tiered pricing mechanism, said Deputy Minister of Industry and Trade Do Thang Hai.



Staff of Viet Nam Electricity check meters.



Hai told the regular Government meeting on Monday that the ministry has been collecting opinions on a new calculation for power prices and would submit it to the Government for approval in August.

Under the new rules, households could choose either a common price or the current tiered pricing mechanism. However, the current six tiers would be reduced to five as it ensures all households with power consumption of less than 700 kWh (98.2 per cent of the total) would not face increased power bills.

The one retail power price would be built based on the average electricity production cost of VND1,864 per kWh without value-added tax (VAT).

The study of the new calculation came about as many households were surprised with surging power bills in May, June and July and to give more choices to customers.

Nguyen Tien Thoa, chairman of Viet Nam Valuation Association and former Director of Price Management Department, said the one power retail price mechanism would be easy for calculation, application and check-ups and supervision for all households as all customers buy the same goods from a supplier.

However, in terms of economy, a common price with scarce resources and insufficient supply would struggle to encourage electricity-saving, he said.

He also said the one price mechanism would not ensure the social security policy for poor and policy prioritised households and it was necessary to make the average price higher.

Hai also answered questions at the cabinet about surging power consumption in recent months.

He said that in May, June and the first half of July, hot weather hit the whole country, especially in the north.

The national average temperature was much higher than the average temperature of 2019. As a result, electricity consumption increased as the number of people using cooling equipment and air conditioners increased sharply.

According to a report of Viet Nam Electricity (EVN), there are currently 26 million customers nationwide using electricity. Of which, there were 3.1 million customers with high electricity usage in May, up by 30 per cent or more compared to April.

Among these, 1 million customers increased electricity consumption by 50 per cent and 215,000 saw their consumption rise by more than 300 per cent compared to April.

Compared to May, the number of customers with high power consumption increased in June to 7.6 million.

Therefore, many customers have had questions about recording electricity consumption and rising bills.

“The Ministry of Industry and Trade spoke with the customers who had a sudden increase in electricity bills,” he said.

The ministry has directed the EVN to improve customer service.

At the same time, MoIT asked EVN to strictly handle violations of technical errors or indexing and others.

Along with that, the ministry also asked EVN to provide customers' electricity bills through software and replace mechanical meters with electronic versions. — VNS

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