Nigerians struggle with estimated billing as meter price nears N250,000 August 19, 2024, 8:57 am NAIRAMETRICS

Nigerians struggle with estimated billing as meter price nears N250,000 

August 19, 2024, 8:57 am

NAIRAMETRICS

The Nigerian Electricity Regulatory Commission’s (NERC) move to deregulate Meter Asset Providers (MAP) was hailed as the much-needed solution to the country’s persistent metering gap crisis.

However, this silver bullet has come with a price, and not just figuratively. The soaring cost of prepaid meters has added a new layer of burden for the average Nigerian household, making the dream of escaping the trap of estimated billing feel like an increasingly distant hope.

For millions of Nigerians, the sharp rise in metering costs from about N80,000 to over N200,000 in just one year has become as burdensome as the problem it was meant to solve: eliminating estimated billing.

Four months ago, NERC introduced a promising policy to deregulate both meter prices and providers, embracing a willing-buyer, willing-seller system aimed at opening up the market. This move was intended to empower customers, allowing them to obtain meters from any approved vendor without relying on the DisCos.

While this policy appeared commendable on paper, it has brought new challenges.

The most pressing of these is the increase in meter prices, exacerbated by the prevailing economic conditions and rising inflation.

According to the National Bureau of Statistics, the number of customers on estimated billing has surged from 5.83 million in Q4 2023 to 6.43 million in Q1 2024, marking a significant 10% rise.

These figures represent millions of households striving to escape the cycle of overbilling and other abuses by their distribution companies, only to find that the path to obtaining a prepaid meter has become even more difficult.

Latest Meter Prices  

Following the announcement by NERC, DisCos and their meter providers partners have declared new meter prices, pointing to the deregulation policy and ailing economic conditions.

None of the new prices is below N100,000, a very sharp increase from the former price announced by NERC in September 2023.

According to the new prices by DisCos, the cost of a single phase meter rose from N81,975 to about N125,000, depending on the DisCo and the vendor the customer is purchasing from.

Different DisCos announced different prices from N120,00 for a single-phase meter to about N240,00 for a three-phase meter, a sharp increase that has made struggling Nigerians question their choices in obtaining meter and estimated billing.

The average prices announced by distribution companies across the country are as follows.

Abuja DisCo:  

Single Phase Meter — Between N105,000 to  N131,000

Three Phase Meter — N198,000 to N220,000

Kaduna DisCo: 

Single Phase Meter — Between N120,000 to N132,000

Three Phase Meter — Between N206,000 to N215,000

Ikeja DisCo: 

Single Phase Meter — Between N120,000 to N125,000

Three Phase Meter — N213,000 to N225,000

Eko DisCo: 

Single Phase Meter — Between N117,000 to N135,000

Three Phase Meter — Between 145,000 to N247,000

This increase in price is true for all the eleven DisCos across the country.

How Nigerians are responding to the new meter prices 

For Nigerians already grappling with soaring inflation, skyrocketing living costs, and the recent hike in electricity tariffs for Band A customers, the sharp increase in meter prices feels like an added weight to their already overwhelming burdens.

Beyond the persistent challenge of availability, there’s a pressing concern about the purchasing power of consumers—many of whom are struggling to make ends meet in today’s harsh economic climate.

A lingering question is the stability of these meter prices, especially with the deregulation of the Meter Asset Provider (MAP) scheme.

Ifeoma Ugbe, a Lagos-based energy expert, said NERC typically announces price hikes at regular intervals, sometimes within a year. But with deregulation, the situation becomes even more uncertain.

“Deregulation means prices will fluctuate based on market realities, so we can’t expect them to stay the same for long,” she said. 

For customers who spoke to Nairametrics, the recent price increase has been met with frustration and concern.

Mr. Adetunji, a resident of Isolo, Lagos, expressed his disappointment, explaining that his household had been attempting to secure a prepaid meter for over a year before the price hike. “Now, we have to pay the new price. We don’t have a choice. And it’s not even as if the meter is readily available,” he lamented.

Usman Johnson, a landlord in Wuse, Abuja, shared a similar sentiment, noting that the increased cost of meters would only discourage customers like himself from obtaining one.

“Where do they expect us to find the money? First, you have to wait endlessly to get the meter, and now we’re expected to pay more. It feels like this government just enjoys raising prices on everything—tariffs have gone up, everything has gone up. It’s becoming increasingly difficult for the common man,” Johnson said. 

In Maryland, along Ikorodu Road, Mrs. Elizabeth Okiro, a store owner, shared her experience. She and other shop owners had been pooling funds to purchase five meters from their distribution company, only to discover that prices had increased significantly.

“Imagine spending over N1 million just to buy meters in this tough economy. We decided we’ll have to wait because after paying, you still have to cover installation costs. The economy is simply harsh. Our landlord eventually advised us to stop contributing—the cost is just too high,” Okiro explained.  

Her store is one of about 20 in the plaza, meaning most tenants are forced to remain on estimated billing.

Deregulation of MAP won’t ease the burden of the Masses  

Energy expert Ifeoma Ugbe argues that deregulating the Meter Asset Provider (MAP) scheme alone may fall short of solving the challenges in the power sector.

“While the government aims to bring in more liquidity and investment, it is crucial that this is done with the interest of the masses in mind,” she says.  

Ugbe emphasized that for any reform to truly benefit the public, it must strike a balance between attracting investors and ensuring affordability for everyday consumers.

Minister of Power Adebayo Adelabu has set an ambitious target: to eliminate estimated billing by the end of the year.

But this goal appears increasingly out of reach. Recent data from Q1 2024 indicates that estimated billing rose by 10%, affecting over six million households.

The federal government plans to address this with the move to purchase 3.5 million meters this year to bridge the metering gap.

However, with around seven million customers still unmetered, significant challenges remain.

This has raised concerns that the government may resort to tariff hikes and a stronger emphasis on cost-reflective pricing.

Lawyer and energy expert Nonso Ikechukwu warns that such a strategy could place a further strain on consumers. “For most Nigerians, higher tariffs are simply unaffordable,” Ikechukwu states. 

He also highlights that rising inflation and currency instability will likely push meter prices even higher, potentially undermining the government’s plans.

“If meter prices continue to climb, it’s hard to see how this policy will succeed,” Ikechukwu adds, questioning whether the measures will actually ease the burden on ordinary citizens.