The Nigerian Electricity Regulatory Commission (NERC) is mulling over the possibility of another price increase for prepaid meters, responding to the surge in production costs faced by manufacturers. Sources familiar with the matter, speaking to Nairametrics, disclosed that meter prices might be left to market forces to determine, diverging from the current regulatory framework.
The consideration for a price hike stems from the challenges posed by the foreign exchange crisis, which has led to escalating production expenses and inflationary pressures on manufacturers. Manufacturers have reportedly halted invoicing Distribution Companies (Discos) in anticipation of an impending upward price revision by NERC.
This move follows NERC’s recent accusation of 11 Distribution Companies (DisCos) nationwide for overcharging unmetered customers, resulting in a hefty fine of N10.5 billion. Furthermore, indications suggest that new applications for meters are currently on hold, awaiting NERC’s announcement of revised pricing rates.
According to an official from a Distribution Company, the anticipation of a meter price increase has halted the processing of new applications until the new prices are formalized. Consequently, customers who have previously applied for meters are experiencing delays, while those who have paid are awaiting meter installations.
The forex crisis in Nigeria continues to hinder manufacturing performance, with the Manufacturers Association of Nigeria (MAN) projecting that average capacity utilization will hover around 50% due to forex-related challenges and high inflation rates until mid-2024.
In September 2023, NERC had revised the price of prepaid meters upwards, with single-phase meters priced at N81,975.16 and three-phase meters at N143,836.10. However, with the current inflation rate at a 27-year high of 29.90% and the significant depreciation of the Naira against the Dollar, consumers may face the prospect of paying over N100,000 for single-phase meters and potentially N150,000 for three-phase prepaid meters in the event of a new price review.
As the sector grapples with these challenges, NERC continues to explore measures to ensure fair pricing and accessibility of prepaid meters while balancing the interests of stakeholders in the electricity supply chain.
