Around 3.2 million poor households in the country will be given support totalling VND1.12 trillion (USD53.3 million) from the State budget following the recent increase in electricity price, said a government official.

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Deputy Minister of Industry and Trade Hoang Quoc Vuong said Prime Minister Nguyen Tan Dung had approved a new average electricity rate of VND1,242 (USD0.05) per kWh, an increase of VND165 (USD0.007) for one kWh compared to last year.

However, poor households, including those with an average income of less than VND400,000 (USD19) per person per month in rural areas and less than VND500,000 (USD24) per person per month in cities, will receive support for 50kWh per month, equivalent to VND30,000 (USD1.40) per month.

Household electricity prices in remote and rural areas, and islands that are not connected to the national electricity network, will have floor and ceiling prices of 1.5 times and 2.5 times higher than the average price. They will receive Government subsidies to make up the difference.

He added that with the support, poor households will have to pay an additional VND20,000 (USD0.95) per month. Retail price applied to households will be VND400 per kWh.

Pham Manh Thang, head of the MoIT\'s Electrical Distribution and Control Department, said about 98 percent of households used less than 400kWh a month while only 2 percent used more.

Household monthly electricity bills will be divided into seven levels.

"Poor and low-income households who use no more than 50kWh per month will pay VND993 (USD0.047) per kWh. However, they must first register with electricity suppliers to benefit from the favourable rate," he said, adding that the deadline for the registration will be the end of this month.

However, many people raised concerns on how the deduction will be distributed to the eligible households.

Minister of Labour, Invalids and Social Affairs Nguyen Thi Kim Ngan said there were more than 3.1 million poor households in the country.

She said the ministry will ask Electricity of Vietnam to transfer the whole support package to them and they will disburse the money.

She added that the most challenging issue was how to give the money to households living in remote areas every month when the sum was so small.

The MOIT\'s Circular 05 proposed a pre-paid card for electricity consumption of households which rent a house.

If applied, the payment will benefit tenants who used electricity temporarily, including students and low-income earners.

Accordingly, the electricity tariff will be VND1,639 (USD0.07), much lower than the VND3,000-VND4,000 (USD0.14-0.19) they have paid at rental houses.

However, Pham Manh Thang said electricity contracts were signed between house owners and power suppliers. There was no condition which required a price list for tenants, thus making it hard to fine violators for selling prices higher than stipulated.

Thang said the industry and EVN will take five to seven months to apply a pilot use of the card. They will have to buy electricity meters, issue cards and advertise the policies to tenants.

"Tenants did not report high electricity prices because they were afraid of being evicted," he said, adding that it will be a challenge for the industry to apply the card.

The circular also stipulated that house owners could only collect 10 percent higher than prices set by the Government and will be fined if found violating the regulations.