• Wednesday, May 22, 2024
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NERC mulls prepaid meter price hike citing forex

A tariff for boiled frogs for boiled frogs

The Nigerian Electricity Regulatory Commission (NERC), the industry watchdog, is reportedly mulling over increasing the already adjusted cost of meters, citing rising production costs for manufacturers.

Sources familiar with the matter revealed that NERC is considering not just a price increase, but a bolder move; freeing meter pricing to market forces, according to the report by Nairametrics. This would mean scrapping the current regulatory control and allowing manufacturers to set their prices.

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The sources, requesting anonymity, further disclosed that meter manufacturers have stopped issuing invoices to electricity distribution companies (Discos) in anticipation of NERC’s decision. This move suggests their expectation of a significant price revision upwards.

In addition, manufacturers are grappling with increased costs due to currency fluctuations and inflationary pressures, making it difficult to maintain current prices.

Meanwhile, a DisCo official said that new meter applications are no longer being processed, citing indications that NERC will soon announce a new pricing rate.

The source also stated that applications will only be processed once the new prices are announced, leaving many applicants without a prepaid meter.

“The cost of prepaid meters is going to go up soon. Meter Asset Providers have stopped selling new meters as they await NERC to approve new prices.

“New meter applications are not being processed until the price changes are reflected. So due to FX issues, the meter manufacturers have stopped sending invoices until the meter price is reviewed.”

NERC approves the cost of prepaid meters, the majority of which are imported into the country as semi-knocked-down units and assembled locally before use.

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Prepaid meters have also evolved, with DisCos adding features that protect against energy theft and provide more consumption data.

Nigeria’s meter deficit is estimated to be more than 7 million, as most customers continue to be billed on estimates.