Hanoi (VNS/VNA) - The Ministry of Industry and Trade (MoIT) is consideringnew models to calculate electricity prices, including one that wouldeliminate its current step pricing, which industry experts havecalled outdated and deeply unpopular among consumers. 

Consumers would be able to choose between the traditional step pricing model,which consists of five tiers based on electricity consumption, and a singleprice model.

The step pricing model sets the tier 1 price at 90 per cent ofthe average price per unit, which is 1,864.44 VND (0.08 USD) for 1kWh,tier 2 at 108 percent, tier 3 at 141 percent, tier 4 at 160 percent and tier 5at 274 percent.

The single price model has just one price per unit for the first 700kWh, whichthe ministry argues most low and middle-income households will not exceed.Consumers who choose this model will pay 145 percent of the average priceper unit, roughly the same rate as tier 3 in the step pricing model. 

The ministry has also floated a similar scheme with tier 5 set at 185 percent,compared to 274 percent in the previous scheme. The single price per unit is,however, set higher at 155 percent of the average price per unit. 

For example, a household that consumed under 99kWh a month would pay 166,000 VNDunder step pricing and 267,000 VND under the single pricing. 

A household that consumed 800kWh a month would pay 2.3 million VND under steppricing and 2.162 million VND under a single pricing, a potential savingof 138,000 VND. The amount of saving would likely become even larger asconsumption spikes past 800kWh per month.

Tran Dinh Long, deputy chairman of the Vietnam Electrical EngineeringAssociation, said the price per unit under the single price schemes remainedtoo high at 145 percent and 155 percent.

He said the ministry may also consider changing to three tiers instead of fivebefore implementing the single price calculation. 

Nguyen Manh Hung, chairman of the Vietnam Standard and ConsumersAssociation, said the new models would benefit up to 30 percent of consumerswith high electricity consumption. Consumers must decide what model fitstheir needs and gives them higher savings. 

Vu Vinh Phu, former chairman of Hanoi Supermarkets Association and Nguyen TienThoa, former head of MoIT's Department of Price Management, said while it maybe easier to apply the single pricing model, the step pricing model mayencourage people to be more efficient and less wasteful with electricityconsumption./.