The Nigerian Electricity Regulatory Commission (NERC) recently announced a 32.8 per cent and 21.7 per cent increase in the cost of electricity prepaid meters. The hike, which took effect from November 15, 2021, is coming at a time that Nigerians are contending with sharp rise in the price of cooking gas and food items.
NERC raised the price of a single-phase meter from the previous cost of N44,896.17 to a revised price of N58,661.69, and the price of a three-phase meter from N82,855.19 to a revised rate of N109,684.36. The new prices are not inclusive of Value Added Tax (VAT). This means that consumers will pay slightly above the cost announced by the regulator. To say the least, this hike indicates that the government is insensitive to the plight of the citizens. The timing is wrong.
The hike contradicts the Federal Government’s National Mass Metering Programme (NMMP), which aims to bridge the metering gap through a free metering plan for unmetered households. The NMMP was also designed to ensure a seamless metering process that allows customers to register and be metered on the same day after following due process. To worsen matters, the government says it plans to review upwards the present electricity tariff from next month.
The needless price hike for electricity meters is uncalled for. It will worsen the regime of estimated billing or “crazy” bills. The rise in the cost of power will impoverish more Nigerians. Any plan to increase electricity tariff ought to start with the sector improving its performance. There is no point increasing the price of meters when power supply is still erratic. Besides, statistics show that more than eight million electricity consumers are still unmetered, meaning they pay for electricity through estimated billings despite the metering interventions by the government.
The reasons adduced by NERC are not enough to warrant such an increase in electricity meter price, especially at this time many Nigerians are groaning under rising cost of food items. Statistics show that though inflation rate has declined marginally in recent months, food prices have been on the rise by over 50 per cent. For six consecutive months, data from the National Bureau of Statistics (NBS) indicate that Nigerians have become poorer, as their purchasing power has been greatly eroded due to high cost of food items. The best thing the government can do now is to suspend any plan to raise electricity meter price. The present purchasing power of average Nigerian worker does not favour any price hike of prepaid meters.
The recent report by the World Bank shows that households’ food security in Nigeria is under threat and could push millions of Nigerians into poverty. The economy is still struggling to recover from the devastating effects of the COVID-19 pandemic. There is rising unemployment and insecurity across the country. These factors are crucial, especially for a product of high social significance like electricity. Any attempt to implement the new policy on electricity meters at this period is unacceptable. It could lead to civil unrest with unimaginable consequences. That is probably why the organised labour has warned of peaceful protests if the decision is not reversed. The fragile security situation does not call for such protests, which will make matters worse.
The regulatory agency and the Discos should be concerned about the present plight of Nigerians. It is disheartening that NERC has remained defiant and uncommitted to protecting electricity consumers. Over time, the Discos have failed to deliver on service levels under the service-based tariff regime. As organised labour has argued, the present move was unilateral. The commission has been accused of not consulting the relevant stakeholders as stipulated in the Electric Power Sector Reform Act, before going ahead to announce the increase in electricity meters. We are aware that both the federal and state governments are having revenue generation challenges. That should not be an excuse to resort to taxing the masses through frequent electricity tariff raise or hike in the price of meters.
From all indications, the power sector is not well regulated even after privatisation . It appears some of the new owners are not creative enough to provide the needed services in spite of bailouts from the government. There is so much deceit in the system. Between September and December, 2020, electricity tariff was increased twice. On November 1, 2020, Discos commenced the implementation of the revised electricity tariff that was jointly agreed upon by organised labour and the government.
Even if the argument of the government and Discos for the increase in price of meters makes sense from the profit perspective, it has equally become imperative for them to also consider the social effects of the price hike. Many Nigerians are already weighed down by many socioeconomic challenges, such rising cost of foodstuff, medicines and cooking gas, among others. They should not be over-burdened further. More consultations and negotiations are necessary to work out more affordable ways to meet the metering needs of electricity consumers.