Abstract
The existing retail electricity tariff for households in Vietnam is the incremental block structure. However, the most recent revision of the electricity tariff structure was in 2014 which it was 7 years - a long period of change in conditions of electricity supply and consumption leading to the need to adjust this structural price appropriately. This article provides an in-depth analysis of the current residential block tariff of residential electricity use to identify shortcomings, thereby, for building options to improve this incremental block tariff structure to ensure the harmonization of different pricing targets especially the equity, efficiency and promote the electricity saving, in the new context of electricity supply and demand in Vietnam.Keywords: Electricity pricing policy, incremental block tariff, Electricity of VietnamJEL Classifications : D4, Q31, Q41, Q43. Q48DOI: https://doi.org/10.32479/ijeep.11534
Highlights
In Vietnam, the electricity tariff level, tariff structure and tariff adjustment regime1 for end-users are determined by the authority of the Prime Minister
Electricity user types are divided into four categories: Residential, industrial, administrative and business users and there are three tariff types applied: Incremental block tariffs (IBTs); time of use (TOU)2 and tariff according to voltage levels
Some projects financed by Ministry of Industry and Trade (MOIT) and World Bank (WB) and realized by foreigner specialists focus on assessment of tariff structure and tariff framework Pardina (2015)
Summary
In Vietnam, the electricity tariff level, tariff structure and tariff adjustment regime for end-users are determined by the authority of the Prime Minister. Revised by Decision 28/2014/TTg in 2014, the last version tariff has six-tiers structure (Table 1) This current block tariff structure still increases the price effects that drive residential consumers to use electricity efficiently and at the same time, enforcing social policies for users with low income, especially on the consumption of the first blocks. This tariff structure has been in use for 7 years while there are changes and adjustments observed from both consumer and power producer sides.
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