A Review of the Nigerian Energy Industry

Cement manufacturers blame high price on gas shortage

Oando's 128 Km gas-pipeline30 April 2014, Lagos – The high cost of cement in Nigeria despite the increase in its production has been attributed to the inadequate supply of gas to manufacturers of the product.

This coming as the Federal Government has finally adopted the use of cement for the construction of roads across the country.

Gas supply to power plants and other industries has been a major challenge to the firms and the Federal Government for months now.

Speaking to journalists at the headquarters of the Federal Ministry of Works in Abuja on Tuesday, the Chief Executive Officer, Dangote Construction Company Limited, Mr. Joseph Makoju, said the price of cement would fall when manufacturers got adequate gas supply.

Makoju, who led a team from his firm to the ministry said, “When the gas infrastructure is completed and all the cement plants convert to gas, it will be cheaper. Forty per cent of the cost of cement production is energy cost and if the cost of production comes down, the end users will enjoy the savings too.”

He argued that the price of cement had, however, been stable despite the increase in electricity tariff.

Makoju said, “For most of the locally manufactured goods in Nigeria, it is only cement that the official price has not changed in the past five years. All manufactured products have been adding in price because of the increases in tariff for power, increases in haulage cost and increases in the cost of raw materials.

“The high volume in local cement production is allowing us absorb cost increases. I agree that cement price will still have to come down, especially with more gas for power.”

On the use of cement for road construction, Makoju said manufacturers had advised the government on the gains associated with the development.

He said, “The cement manufacturers have been in the forefront of the campaign for government to consider the use of cement for the construction of concrete roads. We have done an exercise that shows that it is more cost effective than asphalt because a concrete road can last for 50 years, and by that 50 years, you must have rehabilitated an asphalt road five times.

“It is being adopted, the Federal Ministry of Works is about to release the roads that they intend to build with concrete.”

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