Vietnam reduces average electricity prices while restructuring usage tiers

Vietnam's electricity provider, EVN, implemented a new residential electricity pricing structure on November 1, reducing the average retail price while changing the number of price tiers.

The new policy lowers the average retail electricity price by 2 percent, a rate that remains in effect until March 2027. Under the updated system, the previous 6 tier structure was condensed into 5 tiers. The price for electricity now ranges from 1,901 VND to 3,844 VND per kilowatt hour, excluding value added tax.

The government set the new consumption thresholds at 100, 200, 400, and 700 kilowatt hours. Nguyễn Đình Phước, the Deputy General Director of EVN, explained that the change combines the 2 percent price reduction with the new tier structure. While the reduction helps most households, the restructuring means that heavy users consuming more than 903 kilowatt hours per month may see their bills increase.

For example, a household using 1,000 kilowatt hours will pay approximately 37,300 VND more than they did under the old system. The policy aims to support low and medium consumption households while encouraging heavy users to save more electricity. EVN calculated that over 98 percent of residential households will see a decrease in their electricity bills. The company expects this change to reduce its monthly revenue by nearly 1,600 billion VND.

Despite the price cut, EVN faces challenges in securing investment capital for power sources and grid projects through 2030.