Nigeria Witnesses 145% Price Increase for Pre-Paid Meters
In a significant development, the Federal Government of Nigeria, through the Nigerian Electricity Regulatory Commission (NERC), has imposed a staggering 145% price increment on pre-paid meters between 2021 and 2023.
This move has brought about substantial changes in the pricing structure of single-phase and three-phase pre-paid meters, affecting consumers and the Meter Asset Provider (MAP) scheme.
Price Surge Details: Affecting Single-Phase and Three-Phase Meters
The increase in prices for pre-paid meters is not uniform but varies between single-phase and three-phase meters.
According to a report by Daily Trust, single-phase meter prices surged from N44,896.17 in 2021 to N81,975.16 in 2023. Similarly, three-phase meters experienced a substantial price jump, escalating from N82,855.19 in 2021 to N143,836.10 in 2023.
NERC’s Role in the Price Hike
NERC, responsible for approving meter pricing in Nigeria, greenlit two price increases during this period.
In November 2021, the price of a single-phase meter was raised to N58,661.69, followed by another increase to N81,975.16 in September 2023.
For three-phase meters, prices rose from N82,855.19 in 2021 to N109,684.36 in 2021 and eventually reached N143,836.10 in 2023.
NERC justified these increases as essential to enable MAPs to recover reasonable costs associated with meter procurement and maintenance, ensuring a viable return on investment.
MMAAN’s Influence on the Decision
The Meter Manufacturers and Assemblers Association of Nigeria (MMAAN) played a significant role in influencing NERC’s decision.
In a letter to NERC, MMAAN cited various factors, including increased production costs, export duties, and forex fluctuations, as justifications for the meter price hike.
They demanded prices of N117,323.38 for single-phase meters and N219,368.72 for three-phase pre-paid meters, stating that production costs per meter stood at N101,061.10 and N185,047.20 for single-phase and three-phase meters, respectively.
Impact on Consumers and Challenges
While NERC approved a reduced price increase, experts express concerns about the challenges it poses to electricity consumers.
Currently, approximately six million Nigerians are subject to underestimated billing. To gain access to meters at the new prices, unmetered customers would need to pay a staggering N491.8 billion.
Moreover, electricity distribution companies have halted orders for pre-paid meters from customers who paid before the price hike, adding to the challenges faced by consumers.
Calls for Reform and Fairness
As the meter prices surge, calls for reform and fairness in the electricity market have intensified.
Experts argue that it should not be the responsibility of electricity consumers to provide or fund pre-paid meters, emphasizing that the sector’s privatization agreements included provisions for meter deployment by distribution companies.
Challenges such as customs import duties, devaluation of the naira, and multiple government agency charges at ports have further compounded the situation.
The discussion continues on the need for a more equitable approach to pre-paid meter pricing and distribution.