The House of Representatives joint committee investigating the arbitrary rise in cement prices has called on major producers to submit detailed documents justifying the current market prices.
This demand was made during a public hearing on Friday in Abuja, where the committee quizzed representatives from Dangote Cement Company and Lafarge Africa Plc.
Chairman Jonathan Gaza (APC-Nasarawa) emphasized the committee’s interest in understanding the cost of production from 2020 to the present, which has seen cement prices soar to over ₦10,000 per bag in many parts of Nigeria.
“We need transparency in the cost structure to determine a fair price for all Nigerians,” Gaza stated.
The committee resolved to visit the production plants of these companies after reviewing their financial records to ascertain the true cost of production.
Gaza outlined specific requirements for the companies to provide:
– Average daily consumption and costs of raw materials such as coal, gas, gypsum, limestone, clay, and laterite.
– Details of all imported components and their prices from 2020 to date.
– Local components and their costs in both naira and dollars.
– Summary of monthly prices and quantities of cement produced from 2019 to date.
– Audited financial accounts, bills of lading, and customs duties paid within the period under review.
– Details of tax waivers, other incentives received, and contracts for gas and explosives.
Committee Member, Dabo Ismail (APC-Bauchi) noted that despite sourcing most raw materials locally, Dangote Cement has consistently reported rising profits.
He cited figures showing profits of ₦524 billion in 2022, ₦553 billion in 2023, and ₦166.4 billion so far in 2024.
The Group Managing Director of Dangote Cement, Arvind Pathack, explained that 95% of their production costs are either imported or linked to foreign exchange.
He highlighted significant increases in the costs of inputs like gas, AGO, gypsum, imported coal, and spare parts, attributing the high cement prices to these factors.
Pathack pointed out that logistical challenges, such as poor road conditions, also contribute to higher delivery and maintenance costs.
He stated that cement prices in Nigeria, when converted to dollars, are among the lowest in Africa, with a bag of cement costing $4.43 in Nigeria compared to higher prices in neighbouring countries.
Pathack also noted that prices exceeding N10,000 per bag are likely due to retailer markups, beyond the company’s control.
The committee urged cement companies to review their pricing policies and operations to make cement more affordable for Nigerians.
Chairman Gaza expressed hope that this engagement would lead to a reduction in cement prices, blaming the Federal Competition Consumer Protection Commission for not protecting consumers from middlemen who inflate prices.
In an interview with newsmen, Gaza highlighted the need for effective regulation and oversight to curb exploitative practices in the cement market, ensuring fair prices for consumers.
He said, “We are extremely hopeful that this engagement will lead to a reduction in the price of cement.
“FCCPC has slept on their functions so far, their inactivity and none responsiveness to price is what has put Nigeria where we are today.”
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