The deregulatory action taken by the Nigerian Electricity Regulatory Commission (NERC) against Meter Asset Providers (MAP) was welcomed as the much-needed resolution to the nation’s ongoing metering gap issue.
But there’s a cost to this silver bullet, and not just in terms of money. The average Nigerian household now has an additional financial strain from the skyrocketing cost of prepaid meters, making the prospect of breaking free from the estimated billing trap seem more and more improbable.
The rapid increase in metering fees from over N80,000 to over N200,000 in just one year has been as difficult for millions of Nigerians as the issue it was intended to resolve – the elimination of projected billing.
To open up the market, NERC announced a promising strategy four months ago to deregulate both meter pricing and providers. This policy embraced a willing-buyer, willing-seller system. The goal of this action was to give customers more power by letting them buy meters from any authorized supplier without having to rely on the DisCos.
On paper, this policy seemed admirable, but it has introduced additional difficulties.
The most urgent of these is the rise in meter costs, which is made worse by the current state of the economy and increasing inflation.
The National Bureau of Statistics reports that there was a notable 10% increase in the number of consumers on projected billing from 5.83 million in Q4 2023 to 6.43 million in Q1 2024.
These numbers reflect millions of homes that are trying to break free from the loop of overcharging and other mistreatment by their distribution firms, only to discover that getting a prepaid meter has become even more challenging.
Current Meter Prices
DisCos and their meter supplier partners have announced new meter pricing in response to the NERC statement. They attribute this to the deregulation policy and the poor state of the economy.
The costs have increased significantly from the previous ones released by NERC in September 2023, with none of the new ones being less than N100,000.
A single-phase meter now costs approximately N125,000, depending on the DisCo and the vendor the consumer is buying from, as per the revised tariffs set by DisCos.
DisCos have stated varying costs, ranging from N120,00 for a single-phase meter to approximately N240,00 for a three-phase meter. This significant increase has caused financially disadvantaged Nigerians to reevaluate their options for purchasing a meter and estimating their bill.
Distribution businesses nationwide have released their average prices, which are as follows.
Abuja DisCo:
- Single Phase Meter: N105,000 – N131,000
- Three Phase Meter: N198,000 – N220,000
Kaduna DisCo:
- Single Phase Meter: N120,000 – N132,000
- Three Phase Meter: N206,000 – N215,000
Ikeja DisCo:
- Single Phase Meter: N120,000 – N125,000
- Three Phase Meter: N213,000 – N225,000
Eko DisCo:
- Single Phase Meter: N117,000 – N135,000
- Three Phase Meter: N145,000 – N247,000
All eleven DisCos in the nation have seen this pricing increase.
The reactions of Nigerians to the new meter prices
The dramatic increase in meter fees feels like an additional hardship to Nigerians who are already struggling with crippling inflation, mounting living expenses, and the recent spike in energy pricing for Band-A consumers.
Beyond the enduring difficulty of availability, there is a critical issue regarding consumers’ purchasing power – many of whom are having a difficult time making ends meet in the current difficult economic environment.
The stability of these meter pricing remains a mystery, particularly in light of the deregulation of the Meter Asset Provider (MAP) program.
Energy expert Ifeoma Ugbe, of Lagos, stated that NERC usually announces price increases regularly, sometimes even within a year. However, the situation gets much more hazy when there is deregulation.
We can’t anticipate prices to remain the same for very long because deregulation means they will change depending on market conditions, the speaker remarked.
The News Chronicles spoke to customers who expressed their dissatisfaction and concerns regarding the recent price rise.
Mr. Adetunji, a resident of Arab Road Kubwa in Abuja, expressed his dismay, stating that his family had been trying to get a prepaid meter for almost a year before the price increase. “Now, we must pay the new price. We have no choice. And it’s not like the meter is easily available’, he moaned.
Similar thoughts were expressed by Usman Johnson, a landlord in Dutse Alhaji, Abuja, who pointed out that higher meters would only deter people like him from getting one.
“Where do they think we’ll find the cash? We now have to pay more, on top of the lengthy wait to receive the meter. Tariffs have increased, prices have increased for everything, and it seems like this government just enjoys hiking costs on everything. For the average person, things are getting harder and harder,” Johnson lamented.Â
MAP deregulation won’t lessen the masses’ burden
Ifeoma Ugbe, an energy specialist, contends that deregulating the Meter Asset Provider (MAP) plan might not be sufficient to address all of the problems facing the power industry.
“The government wants to increase investment and liquidity, but it’s important that they do it with the interests of the general public in mind,” she says.
Ugbe underlined that any change must strike a balance between luring investment and guaranteeing affordability for regular customers if it is to actually benefit the public.
Adebayo Adelabu, the minister of power, has set a lofty goal: by the end of the year, projected billing will be eliminated.
But it seems more and more impossible to achieve this aim. According to recent data from Q1 2024, over six million households were impacted by an expected 10% increase in billing.
In order to close the metering gap, the federal government intends to purchase 3.5 million meters this year.
Nonetheless, there are still a lot of obstacles to overcome, with almost seven million consumers not using meters.
This has sparked worries that the administration would turn to higher tariffs and a more stringent focus on price that reflects costs.
