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Prepaid meters price hike seen further widening 7m metering gap

Prepaid meters price hike seen further widening 7m metering gap

The recent increase in the prices of prepaid meters is a disincentive to the nation’s drive to ensure adequate penetration of meters across the country, according to rights groups.

The Nigerian Electricity Regulatory Commission (NERC) announced an increase in the price of electricity meters from N58,661.69k to N81,975.16k for a single-phase meter and from N109,684.36k to N143,836.10k for a three-phase meter.

The price hike which took effect from Wednesday, September 6, 2023, is expected to remain in force until amended or revoked by subsequent orders issued by NERC.

Experts who spoke to BusinessDay decried the increase, saying that it will affect the meagre income of many Nigerians, as the cost of the meters is far above the nation’s minimum wage.

“Considering the low disposable income of an average Nigerian customer, it might be difficult for many to afford the new rates,” said Kunle Olubiyo, president of Nigeria Consumer Protection Network.

According to Olubiyo, there is a need for the electricity regulators and stakeholders in the electricity distribution chain to work out mechanisms for customers’ refunds after purchase, which may be via electricity tokens.

Read also: Nigerians to pay more for electricity as FG hikes prices of prepaid meters

“It might be difficult for many to afford the new rates without a mechanism for refunds and this may further increase the huge metering gaps in the electricity market,” he said.

BusinessDay findings revealed that Nigeria in the first quarter of 2023 had a total of 12,378,243 registered electricity customers, with 5,360,434 of them metered while over 7 million customers remained under the estimated billing.

Olubiyo, however, attributed the price increase to the recent floating of the naira as well as other economic variables that may have impacted the activities of meter assemblers.

He noted the continued call for an increase in the price of meters by operators of assembling plants as well as those involved in meter importation.

“The importers of the prepaid meters and meter assembling plants are of the view that appropriate pricing of single-phase prepaid meters should be N90,000 and that 3-phase prepaid meters should ordinarily be selling for N169,000 or more.

“This is considering the fact that they now source forex from the parallel market, the recent increase in customs imports duties /customs charges, devaluation of the naira and other multiple charges by different government agencies at ports. That has been the position of the meters assembling plants owners and major importers of semi-finished prepaid meters in Nigeria,” he said.

According to NERC, the increase in price of the meters was to ensure the fair and reasonable pricing of meters to both Meter Asset Providers (MAP) and end-users.

Read also: NERC increases price of prepaid meters over naira devaluation

“The order seeks to ensure MAP’s ability to recover reasonable costs associated with meter procurement and maintenance while ensuring that their pricing structure allows for a viable return on investment.

“Evaluate the affordability of meter services for consumers, aiming to prevent excessive pricing that could burden end-users. Ensure that MAPs are able to provide meters to end-use customers in the prevailing economic realities,” it stated.

The NERC noted that the approved meter prices were inclusive of the revised Nigerian Electricity Management Services Agency (NEMSA) sealing cost. With a single-phase meter a N842.80 per unit and a three-phase meter at N1,100.80 per unit.

Also speaking with BusinessDay, Peterson Tari, an Abuja-based public affairs analyst, questioned whose responsibility it is to provide prepaid meters, noting that the meters were useful in ensuring adequate return on investment as well as energy accountability for distribution companies.

“These people will only end up discouraging Nigerians from getting these meters, from which they benefit more.

“Meters ordinarily are designed to provide accurate measurement of electricity usage which further ensures that energy consumed are properly accounted for and the investors get back their correct money.

But if they keep increasing the cost of meters will discourage people from buying.

“Many Nigerians are just trying to survive. The prices of commodities are increasing by the day, many people may rather remain under the estimated billing because of this,” he said.