Pre-paid metres: Much ado about price hike

The recent hike in the cost of pre-paid metres may have added to the burdens of consumers, who are already battling pains in power sector, writes AKINOLA AJIBADE

 

Penultimate week, the Federal Government announced an increase in the cost of electricity meters, with a view to reflecting changes in the nation’s macro-economic policies in recent times.

According to government in a circular sent to the Chairman, Nigerian Electricity Regulatory Commission (NERC), Managing Directors, power distribution companies (DisCos), Meter Assets Providers (MAPs) and made available to New Telegraph recently, the upward review of prices of meters is necessary, in view of the rising rates of inflation, unfavourable foreign exchange regime and attendant depreciating value of naira, among other determinants of economic growth in Nigeria and beyond.

 

In the circular, signed by the Commission’s Chairman, Mr Sanusi Garba, government increased prices of meters relative to their configurations.
For instance, the price of a single-phase meter was increased from N44,896.17 to N58,661.69, while the price of a three-phase meter moved from N82,855.19 to N109, 684.36 respectively.

Like others in the past, the review is not without implementation, as consumers were directed by the government to start procuring meters at the new rates immediately.

The circular, in addition, noted that the new prices were exclusive of the Value Added Tax(VAT), a situation, which implies that consumers of electricity could still pay VAT outside the principal cost

.
Beyond this is the controversy generated by the increase in the prices of meters, a development, which has pitched consumers of electricity against government.
Since last week, when the new prices were announced by the Federal Government, Nigerians have been struggling to come to terms with government’s directives on the issue.

 

Questions such as why, how, when and who advised government to raise the unit price of meters at a period the country cannot boast of uninterrupted power supply have dominated discussions both at homes and offices, since the time government’s announced the price increment last Thursday.

Of note are individual consumers of electricity, who are bemoaning the huge cost of meters in the country.

While the issue is resonating across the nation’s energy landscape, there is an urgent need  reto examine the past, present and future developments in the sector and juxtapose them with the increment, with a view to arriving at a reasonable conclusion on the issue.

 

Consumers’ dilemma

The rise in the cost of meters is having undesirable consequence on consumers of electricity, as many of them are accusing government of lopsidedness in formulation and implementation of policies.

Many consumers said that it would be better if government had not increased the cost of meters or implement it.

According to consumers who bare their minds on the issue, the idea of raising and implementing the cost is killing, in view of the woes foisted on Nigerians by the bad economy.

A consumer, Mr Bamidele Owoepo, said it would have been better if government seeks the opinions of Nigerians on the issue of increasing the cost of meters before imposing it on them.

“How can we explain a situation where many people struggle to get meters for use, without being able to get them,” he asked.

He blamed the officials of the electricity distribution companies and and Meter Assets Providers for the problems in the metering sub-sector, arguing that they were not on top of their games.

Generation

The potential in the sector are said to be under-utilised, as the industry is unable to perform optimally years after it was sold to private investors.

With generation below 5,000 megawatts (Mw) of electricity, despite the fact that the sector has installed capacity of 13,000 megawatts (Mw) of electricity, the story in the sector is pathetic, as well as revealing the fact that the sector is not ripe for growth, despite several billions of naira pumped into it during privitisation by the investors, who bought it.

It is ether the sector cannot access enough gas for electricity generation or that the sector is unable to perform due to poor infrastructure.

Hardly can the sector supply enough electricity to Nigerians, a development, which the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Mallam Kolo Kyari, promised to address soon, once the Abuja, Kaduna and Kano (AKK) pipelines project is completed by the Federal Government, with a view to transport gas to the turbines for electricity generation.

Tarrifs

Electricity customers are yet to get over huge tarrifs imposed on them by the sector’s regulator, Nigerian Electricity Regulatory Commission (NERC), when the government increased the cost of meters in the country.

Based on this, consumers have to battle twin-problems of paying for increased meters price and tarvised

rifs in the sector as reviewed by the Commission.

Nigeria’s situations

Currently, 23.2 million out of 70 million people, who should be working, are out of work in Nigeria. The figure represents 33.3 per cent of the working class in the country. Also, people, who work less than 20 hours a week, form 22.8 per cent of the 70 million people.

The development implies that the country is battling with huge unemployment rates, a situation, which has narrowed down the purchasing power of many Nigerians.

 

While this lasted, the exchange rate between naira to dollar close at N414.3/ $1 in October, while foreign reserves dropped to $39.42 billion from $39.62 billion within two days in October 13 and October 14.

Industry observers say the country is in dire situation, unless critical steps are taken by government to address the problem.

The Managing Director, Power Cam Nigeria Limited, Mr Biodun Ogunleye, said that the sector was yet to rid itself of illiquidity, despite efforts being made by stakeholders to solve the problem.

He said many consumers might find it difficult to afford the new prices of meters implemented by the government, nothwithstanding the fact that they need the device to monitor their consumption level and save cost.

Revised/current prices

The percentage between the reto  tarvised and current prices of a single-phase meter and three-phase meter implemented recently by the Federal Government is not only higher, but does not reflect the purchasing power of many Nigerians, especially consumers of electricity.

A close examination of the prices of meters indicates that government increased the prices by higher percentage.

One was increased by 32.8 per cent while the other was increased by 21.7 per cent respectively.

In his views, the National Coordinator, Coalition for Affordable and Regular Electricity (CARE), Comrade Chinedu Bosah, argues that the difference between the prices of single-phase and three phase meters was too wide, adding that government should not have increased the prices.

He said government had displayed a higher level of ignorance by hiking the cost of meters, stressing that Nigerians could survive whether they have meters or not.
“I’m not trying to preempt what consumers can do or what they cannot do. But history shows that the sector is replete with malpractices, caused by the manipulation of meters by consumers. The government would have done the right things, if it carries consumers along before announcing the new cost of meters,” Bosah said.

National Mass Metering Programme (NMMP)

The Federal Government had, in a public notice, said the increase in the cost of pre-paid meters would not affect the four million meters provided by the National Mass Metering Programme(NMMP), introduced by the government recently.
Gsaid described NMMP as a policy intervention programme, which it introduced in order to provide meters to electricity consumers in the country.

It added that the policy was supported by the Central Bank of Nigeria (CBN) through concessionary loans given to the power distribution companies (DisCos).
It said 900,000 meters had been installed during the take-off of the scheme, without collecting money from the benefitting customers.

Consumers, government said, were not required to pay directly for the meters that would be given to them.

Last line

While all customers are unable to get meters in the first phase of the programme, the second phase, which will start with four million meters very soon, will meet the needs of more customers.