Price Of Cement Rises To N6,000 Due To Haulage Cost

Price of Cement has risen to N6,000 due to logistics and haulage costs. This high inflation has damaged the building materials sector.

Wholesalers across the country recently announced new hikes in cement pricing and associated items.

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Dealers and retailers were taken aback by the new pricing structure, which they were supposedly unaware of. They were worried over the weekend, and many went out to buy more stocks in expectation of future price hikes.

In Nigeria, inflation jumped to 22.4 percent in May, up from 22.2 percent in April, taking it above the upper band of the Central Bank’s 6.0-9.0 percent goal. Because of the high inflation rate, most building supplies are becoming pricey, eroding the purchasing power of many prospective homeowners.

Modern housing construction in Nigeria is still heavily reliant on bricks and mortar and is only possible with the usage of cement.

Cement-based products are essential components for house development, without them, no decent, robust and long-lasting structure or construction could be built.

During the estimating plan, cement contributes to around 40% of building costs.

Three large cement producers dominate the Nigerian cement production market.

BUA controls around 17.6 percent of the market, Dangote 60.6 percent, and Lafarge 21.8 percent, reportedly excluding potential players and competitors.

Despite the quantity of raw materials used in cement production throughout the country, the price of cement has risen dramatically over the years and now exceeds the affordable product range.

Given the essential role that cement plays in practically all elements of construction, some industry operators expressed concern last week that the already stifled industry may suffer further blows that could prove fatal to its operations as a result of the present increase.

According to SurgeZirc NG market study, building material prices have increased by more than 70% between last year and July 2023.

A 50 kilogramme bag of merchandise currently costs between N4, 900 and N6, 000 in Lagos, Ogun, Ondo, and Abuja, with certain places charging between N4, 750 and N4, 800.

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Users in the downstream have already reacted, with block makers charging between N360 and N390 for 6-inch vibrated blocks and between N440 and N480 for 9-inch vibrated blocks.

There were differing opinions about the reason for the hike. While some merchants blamed the current hike on increased logistics and haulage costs as a result of the elimination of fuel subsidies, dealers blamed it on an increase in factory prices by the makers.