With the current imposition of 45 percent import tariff on prepaid meter by Nigerian Customs, the price of a single-phase meter will now be around N75,000 while the price for two-phase meter will be in the region of N100,000.
The Federal Government had stipulated N37,000 and N75,000 as prices of single-phase and two-phase meters, respectively.
With the jacking up of the import tariff, however, consumers will have to spend extra N38,000 to purchase a single-phase meter while those looking for double-phase meters will pay around 25,000 extra to get it.
The imported meters are meant to complement the local manufacturers of meters who cannot currently meet the meter needs of the country of around 5 million.
The local manufacturers are not also going to escape from increased import tariff on meters as many of the components they assembled in the country are imported.
Muyideen Ibrahim, executive secretary, Meters Manufacturers Associations of Nigeria, who spoke in his personal capacity, told BusinessDay that the government should allow the local manufacturers to increase the prices of their products as they need to break even.
He said local manufacturers are supposed to increase the price of their products because they would need money to purchase foreign exchange and buy diesel, which price fluctuates anyhow, to run their generators. They will still need to import some of the components that would be used in assembling their meters.
Other challenges he said manufacturers are facing include going to banks to borrow money at a very high interest rate, variation in foreign exchange, and clearing the goods from the port which has become an uphill task that gives the importers nightmares.
Following the introduction of the Meter Asset Provider regulations in May, a plan to have third-party investors finance meter purchase and recoup proceeds from customers’ retail payment for power, the Ministry of Finance reviewed upwards the import levy on electricity meters from 10 percent to 45 percent and the Nigerian Customs Service began immediate implementation.
The consequence is that the Meter Asset Providers are unable to clear the meters at the ports. This has started to derail the programme as the regulator, the Nigerian Electricity Regulatory Commission (NERC), had directed that all DisCos complete the MAP procurement process by March 31, 2019.
Analysts say this points to a mismatch of priorities by various agencies of government.
“It doesn’t show we are serious about encouraging meter rollout if we are increasing import duty at the same time,” said Chuks Nwani, an energy lawyer and vice president of PowerHouse International, a Lagos-based consultancy.
The Nigerian Customs Service began implementing a revised 10 percent import duty on solar panels soon after the Ministry of Industry, Trade and Investment granted pioneer status to solar energy entrepreneurs and volumes shot up, arguing that solar panels should be taxed the same as generators because they both generate power.
BusinessDay also gathered that the Meter Asset Providers are cash-strapped and unable to fulfil orders for meters. The new import levy provides a convenient excuse to absolve the investors of responsibility.
“The way it is going, the MAPs programme may fail if urgent steps are not taken to check the situation,” says a top executive in one of the DisCos.
Operators decry the seeming reticent nature of the regulator whom, they say, should be canvassing to remove obstacles to the meter rollout scheme. However, NERC, BusinessDay learnt, is blaming DisCos for appointing meter asset providers who lack financial capacity.
While the operators and regulators muddy the waters, electricity customers continue to bear the brunt of unfair electricity pricing through estimated billing by DisCos.
According to NERC’s first quarter report, of the 8,840,801 registered electricity customers in Nigeria, only 3,793,895 or 42.9 percent have been metered as at the end of the period. Thus, 57 percent or over 5 million electricity customers are still on estimated billing which has contributed to customer apathy towards payment for electricity.
Since the setup of the MAPs programme, only about 33,000 new meters have been issued under the scheme which is only about 4 percent of the over 750,000 applications for new meters. Abuja DisCo alone has issued about 30,000 meters.
The MAP Regulations issued by the Commission in March 2018 aims to fast-track the roll-out of end-use meters through the engagement of third-party investors for the financing, procurement, supply, installation, and maintenance of electricity meters.
According to NERC, a review of the customer population data indicates that only Abuja, Benin, and Port Harcourt DisCos had metered more than 50 percent of their registered customers as at the end of March 2019.
The disaffection by customers is seen in the fact that of the 151,938 complaints from consumers in the first three months of this year, metering and billing accounted for about 61 percent or 92,626.
Olusola Bello
