The Minister of Industry, Trade and Investment, Mrs. Doris Nkiruka Uzoka-Anite, has advocated for extending gas concessions currently given to electricity companies to cement manufacturers to help address rising prices.
She made this statement during an investigative hearing by the House of Representatives Joint Committee on Solid Minerals, Industry, Commerce, and Special Duties in Abuja on Tuesday. The minister was represented by the Permanent Secretary of the ministry, Mr. Nura Rimi.
Mr. Rimi emphasized that cement manufacturers should receive the same gas pricing benefits as electricity distributors.
Mrs. Uzoka-Anite said that a recent meeting with the Minister of Works, Mr. David Umahi, and major cement manufacturing companies led to the recommendation.
She stated, “There is a need for a friendly gas pricing. The meeting recommended that gas to power concession given to the electricity companies should also be enjoyed by the cement companies.”
Challenges faced by cement manufacturers
She highlighted several challenges faced by cement manufacturers, including the cost of gas, high import duties on spare parts, inadequate road networks, high foreign exchange rates, and the smuggling of cement to neighbouring countries.
She noted that both the cement manufacturers and the government recognize that the current high price of cement is abnormal in some areas nationwide.
At the hearing, it was unanimously agreed that retail prices for cement should not exceed N8,000 per 50kg bag, depending on the location, and cement manufacturers must establish a price monitoring mechanism to ensure compliance.
Manufacturers agreed to implement this mechanism and to sanction any distributors or retailers who fail to comply.
She stated that Nigeria is self-sufficient in cement manufacturing, with major players such as Dangote Industries Ltd, BUA Group, and Lafarge Holcim churning out enough to even export.
Efforts to re-engage cement manufacturers
She added that the Ministry is discussing how to re-engage cement companies that have halted construction activities, understand their challenges, and find ways to bring them back into the sector.
Rep. Gaza Gbewfi, Chairman of the House of Representatives committee, expressed surprise that cement manufacturers are complaining about road conditions, considering their activities significantly contribute to road damage, emphasizing that it is the corporate responsibility of cement companies to ensure road maintenance.
Gbewfi urged the Ministry to provide the minutes from its meetings with cement manufacturers, a comprehensive report of all pioneer status issued to cement companies since inception, and a list of incentives available to them.
What you should know
The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), earlier this year set a new base gas price for companies in the power sector and commercial users such as cement manufacturers.
For companies in the power sector, the new base gas price was set at $2.42 MMBTU while commercial users would pay a higher price at $2.92 MMBTU.
In the first quarter of the year, cement prices skyrocketed to about N10,000 per 50kg majorly due to increased energy cost, Naira depreciation, leading to increased import cost for raw materials and high cost of transportation.
