Your prepaid electricity cost comes from one formula: energy units × your tariff band’s rate, plus a fixed charge and 7.5 percent VAT, both deducted before your payment is converted to units.
That’s why ₦10,000 never buys a neat, round number of kilowatt-hours, and why two neighbors on different bands get different unit counts for the same payment.
The prepaid electricity billing formula
Every token you buy runs through the same calculation, whether you’re on AEDC, IKEDC, or any other DisCo; only the tariff rate changes.
What each part of the formula means
- Energy consumption (kWh): the number of kilowatt-hours your payment ultimately buys, shown on your meter after the token loads.
- Tariff rate: the price per kWh set for your band, published by your DisCo under NERC’s Multi-Year Tariff Order (MYTO).
- Fixed charge: a flat monthly service fee deducted from your payment regardless of how much power you use.
- VAT: value-added tax at 7.5 percent, charged on the energy portion of your payment, not on the fixed charge.
Where VAT and fixed charges fit in
Your DisCo doesn’t add VAT and the fixed charge on top of what you pay. It removes them first, then converts what’s left into units at your band’s rate.
Pay ₦10,000 and your meter won’t show ₦10,000 worth of energy; it shows what’s left after those two deductions.
This is the detail most people miss when they compare what they paid to what showed up on the meter.
Worked example: calculating a prepaid bill
Here’s the full calculation using AEDC’s published Band C rate of ₦50.00 per kWh, current under the November 2025 MYTO review effective from December 7, 2025.
Rates differ by DisCo and band, so swap in your own DisCo’s published rate before relying on this for your own bill.
Step-by-step calculation
- Start with your payment: ₦10,000.
- Subtract the fixed charge, typically around ₦750 for a residential account: ₦10,000 − ₦750 = ₦9,250.
- Remove 7.5 percent VAT from that balance: ₦9,250 ÷ 1.075 = ₦8,604.65.
- Divide the result by your band’s tariff rate: ₦8,604.65 ÷ ₦50.00 = 172.09 kWh loaded to your meter.
Change the band, and the outcome changes sharply. The same ₦10,000 on AEDC’s Band A rate of ₦209.50 per kWh would load closer to 41 kWh, because you’re paying far more per unit for a feeder that promises 20-plus hours of daily supply.
Before assuming your bill is wrong, confirm Nigeria’s electricity tariff bands (Band A to E) for your own feeder, since the band, not the DisCo, drives most of the difference.
Why your token never converts to a clean number of units
The fixed charge and VAT deduction happen before division, not after, so unless your payment divides evenly by your tariff rate after those deductions, you’ll always land on a decimal.
A token showing 172.09 kWh instead of a round 200 kWh isn’t a fault; it’s the formula working as designed.
Why your tariff band changes what you pay
Nigeria’s electricity market prices power by how many hours of supply your feeder is expected to deliver, not by neighborhood or house size.
How to find out your band
Your band is printed on your bill or visible when you check your meter status through your DisCo’s app or USSD code.
If you’ve never confirmed it, call your DisCo’s customer line and ask directly, since assuming your band based on what a neighbor pays can lead you to the wrong formula entirely.
Common mistakes people make calculating their prepaid cost
- Applying the tariff rate to the full payment amount instead of subtracting the fixed charge and VAT first, which inflates the expected unit count.
- Using a Band A rate from an online example when their actual meter is on Band C or D, producing a wildly wrong estimate.
- Assuming the fixed charge is the same across all DisCos, when NERC allows some variation by service area.
- Forgetting that VAT applies only to the energy portion, then subtracting it from the whole payment and getting a slightly wrong final figure.
What to do if your units run out faster than expected
If your units are disappearing faster than your own calculation predicts, the first thing to rule out is a faulty meter, not overuse.
A meter that’s over-registering consumption will burn through correctly calculated units far quicker than your appliances justify, and that’s a fault your DisCo is required to investigate and correct.
Checking for prepaid meter faults or estimated billing creeping in
Compare your last three tokens against your last three verified unit counts. If the kWh-per-naira ratio has quietly dropped without a tariff change, ask your DisCo to test the meter.
And if you’ve noticed unexplained charges that don’t match this formula at all, it’s worth understanding the NERC capping order on estimated bills, since a meter fault can sometimes push an account back onto an estimated basis without much warning.
If your DisCo won’t explain the discrepancy, your DisCo’s official complaint contacts are where to escalate it, and if you’re still unsure whether your account should be prepaid or estimated in the first place, the full breakdown of the real difference between prepaid and estimated electricity billing in Nigeria covers both systems side by side.
This formula only tells you what a payment should buy; it won’t tell you whether the power is actually there when you need it.
If your DisCo’s promised band doesn’t match what you’re getting in daily hours, that gap between paper and reality is exactly what Arandmi tracks: residents rate the power and internet where they live, so the next person knows before they commit.
Create a free account and rate your area, since an accurate hours-of-supply picture helps anyone comparing neighborhoods make a better housing decision than a tariff band label alone ever could.
Frequently asked questions
Why did I get fewer units than last time for the same amount of money?
The most common reason is a tariff or band adjustment, followed by a change in the fixed charge NERC allows your DisCo to deduct.
Since the formula removes the fixed charge and VAT before converting the remainder to units, even a small increase in either deduction reduces the units you receive for an identical payment.
Compare your last two tokens’ kWh-per-naira ratio directly; if it’s dropped without a public tariff change announcement, ask your DisCo for a breakdown of your last vend.
Does the fixed charge on a prepaid meter change from month to month?
No, the fixed charge is a flat amount set for your account type and doesn’t fluctuate with how much or how little power you use in a given month.
It’s deducted every time you vend, not once monthly, which is why frequent small purchases can feel less efficient than one larger purchase, since the fixed charge is removed from each transaction.
Some DisCos publish their exact fixed charge; if yours hasn’t, its customer service line can confirm the figure applied to your account.
Is prepaid electricity cheaper than estimated billing in Nigeria?
Prepaid is typically cheaper in practice, not because the tariff rate itself differs, but because you only pay for the units you load and actually use.
Estimated billing often folds in a share of a transformer area’s unrecovered consumption, including power lost to nearby illegal connections, which prepaid customers on their own meter never absorb.
Two households on the same band can end up paying noticeably different amounts purely because one is metered and one isn’t.
Can I calculate my expected units before I pay, not just after?
Yes, rearrange the same formula: subtract your usual fixed charge from the amount you plan to pay, divide by 1.075 to remove VAT, then divide by your band’s tariff rate.
This gives a close estimate of the units you’ll receive, though the final figure your DisCo’s system generates may differ by a small margin depending on rounding rules built into their vending platform.
Treat the result as a planning estimate rather than an exact promise.
Run your own numbers through this formula before your next purchase, and keep your last few tokens on hand so you can spot a shift in your band or fixed charge early, before it turns into a much larger bill.