Alex Omenye
The Nigerian Electricity Regulatory Commission is contemplating another increase in the price of prepaid meters, responding to heightened production costs faced by manufacturers.
According to reports, the regulator might allow market forces to determine meter costs instead of the current regulated pricing.
Manufacturers have reportedly halted issuing invoices to Distribution Companies (Discos) in anticipation of an upward price revision by NERC. The potential price increase is linked to the foreign exchange crisis, causing elevated production costs and inflationary pressures on manufacturers.
NERC recently accused 11 Distribution Companies (DisCos) of overcharging unmetered customers, resulting in a fine of N10.5 billion. There are indications that new applications for meters are on hold until NERC announces a new pricing rate.
The delay in processing applications stems from expectations of a review in meter prices due to foreign exchange challenges. Meter manufacturers have reportedly suspended sending invoices until the meter price is reevaluated.
Customers have expressed concerns about delays in obtaining meters despite applying weeks or months earlier. Some customers who have paid for their meters also reported delays in receiving them.
An official from a Distribution Company indicated that the processing of new meter applications is pending until NERC announces new prices. However, customers who have paid for meters may not be required to pay additional costs, irrespective of the potential price increase.
NERC typically approves the cost of prepaid meters, most of which are imported as semi-knocked-down units and assembled locally. Nigeria faces a meter deficit of over 7 million, contributing to estimated billing for many customers.
The ongoing foreign exchange crisis and high inflation in Nigeria are impacting the manufacturing industry. The Manufacturers Association of Nigeria (MAN) anticipates that average capacity utilization will hover around 50%, limiting manufacturing performance until mid-2024.
In September 2023, NERC previously increased the price of prepaid meters, with a single-phase meter costing N81,975.16 and a three-phase meter priced at N143,836.10. With the current economic challenges, consumers might face higher costs for prepaid meters in the upcoming review, potentially exceeding N100,000 for a single-phase meter and N150,000 for a three-phase meter.
