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Posted by on Sunday September 14, 2014 at 22:31:54:

Electricity in Nigeria is getting more expensive and even moreso now that electricity consumers are made to migrate to the new prepaid billing system from the old post paid billing method.

With the new prepaid billing system, Nigerians would have to pay for electricity units in advance by buying meter tokens or PINS which would be used to recharge their electricity meters.

The cost of Prepaid electricity in Nigeria is billed to consumers in two forms which are fixed and variable costs. There is a fixed monthly cost which consumers have to pay as long as they have active electricity meters and the last time I checked it was N750 per month and it's meant to be paid only once a month. One variable cost electricity consumers would also have to pay is calculated by multiplying the number of electricity used in KWH by the electricity tariff.

Another variable cost we have to consider is the issue of govt tax which is placed on electricity bill to be borne by the consumers. This sort of tax is called VAT and based on my experience with buying electricity tokens from the PHCN, there is a VAT charged on both the fixed monthly charge and the Units purchased and the rate is set at 5%.

With the prepaid electricity billing system, one of the things Nigerian consumers normally would like to know is how much electricity in units that their money can buy for them.

Let's assume a consumer would like to know how many units of electricity his N1000 can buy for him and the electricity tariff is N15.63/KW while the monthly charge is N750, then we can calculate the number of units as follows:

Units = [N1000-(N750*1.05))/15.63]*0.95 = 12 units of KWH

The above formula assumes that a fixed monthly charge of N750 has not been paid and so therefore is to be first deducted,

If however the fixed monthly charge is not included or has already been paid, then the new formula will be:

Units(excluding Fixed monthly charge) = [N1000/15.63]*0.95 = 60.7 units of KWH

The above calculations are only valid if and only if:

- Fixed monthly charge = N750
- Electricity tariff = N15.63
- A 5% VAT is charged on both the fixed monthly charge and Units purchased
- Total amount paid by consumer is just N1000.

So, we see from the above calculation that N1000 can only buy at least 12 units and at most 60 units of prepaid electricity credit from the PHCN

Re: How many units of electricity can N1000 buy in Nigeria Reply by Idowu Ojo on Monday February 23, 2015 at 16:19:9:

Very very helpful

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