VietNamNet Bridge – Around 3.2 million poor households in the country would be given support totalling VND1.12 trillion (US$53.3 million) from the State budget following the recent increase in electricity price, said Deputy Minister of Industry and Trade Hoang Quoc Vuong.

However, poor households, including those with an average income of less than VND400,000 ($19) per person per month in rural areas and less than VND500,000 ($24) per person per month in cities, would receive support for 50kWh per month, equivalent to VND30,000 ($1.40) per month.

Household electricity prices in remote and rural areas, and islands that are not connected to the national electricity network, will have floor and ceiling prices of 1.5 times and 2.5 times higher than the average price. They will receive Government subsidies to make up the difference.

He added that with the support, poor households would have to pay an additional VND20,000 (0.95) per month. Retail price applied to households would be VND400 per kWh.

Pham Manh Thang, head of the MoIT's Electrical Distribution and Control Department, said about 98 per cent of households used less than 400kWh a month while only 2 per cent used more.

Household monthly electricity bills will be divided into seven levels.

"Poor and low-income households who use no more than 50kWh per month will pay VND993 ($0.047) per kWh. However, they must first register with electricity suppliers to benefit from the favourable rate," he said, adding that the deadline for the registration would be the end of this month.

However, many people raised concerns on how the deduction would be distributed to the eligible households.

Minister of Labour, Invalids and Social Affairs Nguyen Thi Kim Ngan said there were more than 3.1 million poor households in the country.

She said the ministry would ask Electricity of Viet Nam to transfer the whole support package to them and they would disburse the money.

She added that the most challenging issue was how to give the money to households living in remote areas every month when the sum was so small.

"Most of the people, especially poor and low-income ones, have suffered from increasing prices of goods and other costs in the week since the power rise," Nguyen Thi Hoa, a resident in Ha Noi's Cau Giay District said.

Hoa said several items had been increased from 10 to 15 per cent due to the price hikes in electricity and petrol.

"Our monthly salary is VND7 million ($333) which was enough for three people including our son. We now have to pay VND500,000 ($23.80) more for our house rental; electricity, water and daily spending is VND1 million ($47.60) more per month," she said, adding that they could not live from their income.

"However, I was luckier than students who have no income or a little from their part-time jobs," she said.

Hoang Nam Giang, a student at the Banking Academy, said taking advantage of the increase, his house owner had raised their rental from VND200,000-300,000 ($9-14) per room a month.

"In addition, prices of electricity and water are also higher. We have to pay VND2,500 to 3,000 ($0.1-0.14) more a month per kWh while the water price is VND10,000 ($0.40) higher," Giang said.

He added that he had to live in Phung Khoang Street, which was far from the city centre and his university, to save costs.

"Some students had to move to downgraded houses to reduce rent," he said.

Nguyen Thu Huong said prices of goods increased 10 to 15 per cent while rents were 30 per cent higher.

"Our monthly rental was VND2 million ($95) before the Tet (Lunar New Year) Holiday. Our house owner asked to increase the rental 30 per cent, equivalent to VND2.6 million ($123)," she said.

"I had to find part-time jobs to afford the hike as my parents find it hard to pay more for my study as their income is from farming," she said.

The MOIT's Circular 05 proposed a pre-paid card for electricity consumption of households which rent a house.

If applied, the payment would benefit tenants who used electricity temporarily, including students and low-income earners.

Accordingly, the electricity tariff would be VND1,639 ($0.07), much lower than the VND3,000-4,000 ($0.14-0.19) they have paid at rental houses.

However, Pham Manh Thang said electricity contracts were signed between house owners and power suppliers. There was no condition which required a price list for tenants, thus making it hard to fine violators for selling prices higher than stipulated.

Thang said the industry and EVN would take five to seven months to apply a pilot use of the card. They would have to buy electricity meters, issue cards and advertise the policies to tenants.

"Tenants did not report high electricity prices because they were afraid of being evicted," he said, adding that it would be a challenge for the industry to apply the card.

The circular also stipulated that house owners could only collect 10 per cent higher than prices set by the Government and would be fined if found violating the regulations.

VietNamNet/Viet Nam News