The Federal Government has threatened to begin cement importation if manufacturers fail to reduce the price from N15,000 to N7,000.
The Minister of Housing, Ahmed Dangiwa gave this warning to the cement and building materials manufacturers in Nigeria during a meeting in Abuja on Tuesday following the inflated price of cement from N6,000 to N15,000 in less than a week.
During their previous meeting with Minister of Works Dave Umahi on Monday, the manufacturers resolved that they would only reduce the price of cement if the FG fulfilled their demands which included reconstruction of bad roads across the country, reduction of foreign exchange rate, and the cost of gas.
The Minister of Housing, Dangiwa said the raw materials used for cement production such as limestone, silica, clay, and gypsum are available in the country and it is neither imported nor affected by the economic hardship. Therefore, their demands are baseless and unreasonable.
Reacting to this, Dangote Plc said the hike in price was caused by the mining equipment and the rising cost of gas.
"Most of the cement plants in Nigeria use gas to produce, the gas is indexed to a dollar and it is almost half of the total cost of production. So if 50 percent of your cost of production is indexed to the dollar it means if the dollar changes then your total expenditure would change in that direction.
For us to mine the limestone, one needs to import the mining equipment and the equipment is a substantial part of the cost of production, you have to invest in a lot of those equipment and invest in keeping them going.
On the issue of the gas, we also have the issue of the quantity of gas, we are not getting enough gas to produce enough to put into the market then we talk about the price and quality of the gas because they are all related."