Legal Nigeria

Naira crisis to double prices of meter as manufacturers seek liberalisation.

The free fall of naira and rising inflation may double the current price of electricity meters for over eight million Nigerians. With an indication that the Nigerian Electricity Regulatory Commission (NERC) may in the coming days increase the price of the asset, which according to extant regulation, was to be provided by the distribution companies, some players in the sector told The Guardian yesterday that the continuous tinkering with the price by the regulator is anti-market.

With the exchange rate at about N1,500/$ and inflation nearing 30 per cent, The Guardian gathered that the Association of Meter Manufacturers of Nigeria (AMMON) had approached NERC for double the current metering prices.
NERC had increased the price of a single-phase to N81,975.16, up from N58,661.69.

Similarly, the cost of a three-phase meter has increased to N143,836.10 from N109,684.36.
The spokesman for NERC, Dr Usman Arabi, did not confirm the development, as messages and calls to his telephone were not returned as of the time of filing this report.
While Nigeria currently has about 13 million registered grid-connected electricity customers, only about five million have been metered since the electricity sector was privatised over 10 years. About eight million users are still billed arbitrarily.

Sources had said meter suppliers have stopped offering the facility to distribution companies at the old prices, basing their decision on the escalating economic realities, as over 80 per cent of metering components are imported.
Chairman/Chief Executive Officer of Momas Electricity Meters Manufacturing Company Limited, Kola Balogun, said liberalisation of meter service provision is the right way to go, adding that NERC has no business in determining prices of the product. He is also asking the regulator to review metering regulations in such a way that customers can own the asset and relocate anytime with it.

Currently, ownership of meters is in the hands of distribution companies. As such most of the consumers, who are buying to install in their houses are to be repaid by the distribution companies, although the implementation is questionable.

Balogun said NERC ought to allow market structure and competitiveness in the metering sub-sector to accelerate their deployment and close the gap. He also called on NERC to limit the number of players in the market based on the capacity of investment.

Source: The Guardian.