Hanoi (VNA) - The Ministry of Industry and Trade (MoIT)has released a draft of the Prime Minister's decision on the structure ofretail electricity tariffs for public feedback. The draft proposes a newpricing scheme based on a percentage of the average retail price of electricityfor different groups of users.

The proposed scheme includes specific retail prices for variousgroups such as production, business, administrative, non-business, daily use,electric vehicle charging stations and tourist accommodation.

Regarding the retail electricity tariffs for daily use, the planproposed by the MoIT, which suggests reducing the pricing tiers from six tofive, is not much different from the proposal in September 2022. This changenarrows the gap between the first steps and expands the pricing range forhigher consumption levels.

Under the new plan, the first two steps are combined into tier 1,where the price for the first 100kWh is set at 90% of the average retail price.Tier 2, which remains the same as before (101 to 20 kWh), has a price equal to108% of the average retail price. Tier 3 widens the consumption gap from 201 to400kWh compared to before, priced at 136% of the average retail price. Tier 4covers consumption from 401-700kWh, priced at 162% of the average retail price,while tier 5 includes consumption of 701kWh or more, with a price equal to 180%of the average retail price.

These prices do not include value-added tax (VAT) and are based onthe average retail price of electricity, which was adjusted in May 2023 to 1,920.37VND (8 US cent) per KWh.

With the new five-tier option, the lowest average retail price ofelectricity is 1,728 VND/KWh, and the highest is 3,457 VND/KWh (excluding VAT).The pricing scheme aims to maintain stable electricity prices for low-incomehouseholds and those with low electricity usage while providing incentives forefficient electricity consumption.

The proposed changes will result in reduced electricity bills for89% of households using 700kWh or less. However, households consuming 701 kWhper month or more (2% of households) will experience an increase in theirelectricity bills.

For production, business, administrative customers, electricvehicle charging stations, and tourist accommodation establishments, the pricesare categorised based on voltage levels, ranging from 1 to 35kV, with thelowest price set at 54% and the highest price at 167% of the average retailprice of electricity.

This draft also includes electricity prices for electric vehiclecharging stations for the first time, ranging from 68% to 205% of the averageretail price based on voltage level.

The MoIT has stated that the proposed retail prices aim tomaintain consistency while affecting different customer groups to varyingdegrees. Some groups will benefit from reduced electricity bills, while otherswill face increases.

The draft decision also specifies that households classified aspoor based on income criteria, as determined by the Prime Minister, willreceive electricity subsidies. The monthly subsidy amount is equivalent to thecost of electricity usage of 30kWh, calculated based on the current retailprice of electricity for household usage in tier 1./.