PM Approves Power Price Hike Schedule for 2007-2010

Prime Minister Nguyen Tan Dung has signed a decision approving the electricity price increase roadmap for the 2007-2010 period.

 

Under the decision dated December 4, retail power prices will rise to VND842 per kWh from January 1, 2007, VND890/kWh from July 1, 2008 and will be regulated by the market from 2010.    

 

The adjustment plan for electricity rates in 2007 is based on principles of supporting poor and low-income earners as well as 80 per cent of the population living in rural areas, gradually abolishing subsidies for production activities and encouraging electricity saving.

For households using less than 100kWh a month, the current rate of VND550/kWh will be maintained. Households using between 101 and150 kWh a month will pay VND1,110/kWh, between 151 and 200 kWh VND1,470, between 201 and 300 kWh VND1,600, between 301 and 400 kWh VND1,720 and 401 kWh or more VND1,780.

 

The PM also requested electricity production and trading enterprises to reduce management costs and energy loss, setting a target for the electric industry of 3-4 per cent cost saving per year and reducing electricity losses by the national grid to 8 per cent by 2010.

 

In Vietnam, it takes one kWh of electricity to create $1 toward GDP, while other regional countries require only $0.2.  

 

The decision will take effect from January 1, 2007.