The price of prepaid meters may be raised once more by the Nigerian Electricity Regulatory Commission (NERC).
According to people with knowledge of the situation who spoke with Nairametrics, this thinking is a response to the rising production costs that meter makers are facing.
Additionally, THE MATRIX discovered that the regulator might even go beyond raising prices and merely let market forces decide how much meters cost. Meter prices are currently set by the regulatory body.
According to these anonymous sources, manufacturers have stopped sending Distribution Companies (Discos) invoices because they expect the NERC to raise prices.
According to the sources, the increase in prices is directly related to the foreign exchange crisis affecting the economy, leading to increased production costs and inflationary pressures on manufacturers.
Earlier last week, NERC accused the 11 Distribution Companies (DisCos) nationwide of overcharging unmetered customers, resulting in a fine of N10.5 billion.
Meanwhile, an official from a Distribution Company informed Nairametrics that new applications for meters are no longer being processed, as there are indications that NERC will soon announce a new pricing rate.
The source also mentioned that the applications can only be processed once the new prices are announced, leaving many applicants without a prepaid meter.
He said, “The cost of prepaid meters is going to go up soon. Meter Asset Providers have stopped selling new meters as they await NERC to approve new prices.
“New meter applications are not being processed until the price changes are reflected.
So due to FX issues, the meter manufacturers have stopped sending invoices until the meter price is reviewed.”
Some customers who spoke to Nairametrics complained of not being able to get meters despite applying weeks earlier and in some cases months. Others who had paid for their meters also complained of delays in getting the meters.
Another DisCo source opined that the new applications for meters are not being processed until the cost of meters is reflective of the situation in the country.
However, they stated that customers who have paid will get their meters and may not be required to pay any other cost regardless of whether a new meter cost is approved.
NERC, the sector regulator, approves the cost of prepaid meters, most of which are imported into the country as semi-knocked-down units and assembled locally for use.
Prepaid meters have also evolved over the years with DisCos including features that mitigate against energy theft and offering more consumption data.
Nigeria’s meter deficit is thought to be over 7 million as most customers continue to be billed on estimates.
FX Crisis limiting manufacturing performance
The Manufacturers Association of Nigeria (MAN) has earlier reported in its ‘Manufacturing Sector Outlook for 2024’, that average capacity utilization is expected to linger around the 50% mark due to forex-related challenges and the prevailing high inflation rate.
The report noted that the forex crisis and high inflation in the country will limit its performance in Nigeria till mid-2024.
It said: “Average capacity utilization will still hover around the 50% threshold as the forex-related challenges and high inflation rate limiting manufacturing performance may linger until mid-year.
“The sector may experience a meagre improvement in manufacturing output as forex and interest rates-related challenges are expected to subside from the third quarter.”
