Dealers, forex responsible for high prices of cement — BUA – Newstrends
Connect with us

Business

Dealers, forex responsible for high prices of cement — BUA

Published

2 weeks ago

on

Alhaji Abdul-Samad Rabiu, Chairman of the BUA Group

Dealers, forex responsible for high prices of cement — BUA

The Chairman of BUA Cement, AbdulSamad Rabiu, yesterday, said cement dealers frustrated his company’s plan to sell cement at N3,500 per bag last year.

Speaking at the 8th Annual General Meeting of the company in Abuja, Rabiu also said that while his company sold over a million tons of cement to dealers at N3, 500, per bag, with the intention that they would pass the benefits to end-users, the dealers sold a bag of cement to consumers at between N7000 and N8,000.

He said the company had to abandon the policy as its intervention was not to subsidise dealers.

According to him, BUA Cement could not stop the dealers whom he said made huge profits from the high margin because the company had no control over prices in the open market.

He added that the Naira devaluation last year and the fuel subsidy removal also played roles in making the policy unsustainable.

Rabiu stated: “So, a lot of the dealers took advantage of that policy. Rather than pass the low prices to the customers, they were selling at even double the price we sold to them.

“Some were selling at N7, 000 and 8 000 per bag. They made a lot of money with the very high margin. I think we had sold more than a million tons at N3,500 before we realised what the dealers were doing.

“And then, because of the issues that Nigeria faced at the time about devaluation of the Naira last year and the removal of fuel subsidy, we could not continue that policy.

“We wanted that price to stay at that level but dealers refused. So, we could not sustain that simply because we did not want to be in a situation where we are subsidizing dealers.

READ ALSO:

“I’m referring to the point when the foreign exchange rate moved from about N600 to maybe N1,800 to the US Dollar. So, it became even more challenging and more difficult for us to actually sustain that price policy.”

He said, however, that the company had continued to work towards making sure that prices did not escalate at levels of the percentage increase of the Naira devaluation.

His words, “If you see the exchange rate then, and the exchange rate today, you will see that cement is actually cheaper today than what it was last year, the reason being that if the dollar was up the costs go up by same margin and the price of cement should actually be, maybe, N10,000 Naira per bag.

The price of cement, if you take the N4,000 that it was in the beginning of last year, at 4,000 and today’s N6,000, it’s only 50% increase.

“So, we directly pushed to ensure that the price of cement is not getting higher than what it is today.

“But then again, you have areas where everything is dollar-dominated. Energy is the biggest cost. And our energy today is denominated in dollars. We buy gas to power our plants mainly. And gas is priced in dollars.”

The chairman revealed that one of BUA’s plants’ monthly invoice is about N15 billion or maybe N16 billion monthly. It used to be N3 or N4 billion. That is just one example.”

According to the financial report presented by the Board of the company, the company recorded a strong revenue growth of 27.4% rising to N460 billion against 2022 figure of N361 billion, resulting from its increasing market share.

However, with the devaluation of the Naira in June 2023, and its continued depreciation, as well as growing inflation, the Company experienced increasing price pressures which affected production costs, and consequently increasing the total cost by 39.5% to N276 billion as against 2022 figure of N197.9 billion.

Within this period under review, a net foreign exchange loss of N70 billion was recorded, with N52.5 billion attributed to finance costs.

Despite these challenges, the Company reported a net profit after tax of N69.5 billion and declared a N2 dividend per share.

Dealers, forex responsible for high prices of cement — BUA

Related Topics:
Advertisement

Business

NNPC hints petrol may rise above N1,000/litre, releases fresh price list

Published

4 hours ago

on

September 16, 2024

By

NNPC hints petrol may rise above N1,000/litre, releases fresh price list

The Nigerian National Petroleum Company Limited (NNPCL) has hinted that the price of premium motor spirit (PMS), also known as petrol, may rise above N1,000 per litre in its retail stations.

In a notice on Monday, NNPC Ltd released estimated prices of petrol (obtained from the Dangote Refinery based on September 2024 pricing) in its retail stations across the country.

According to the notice, the estimated pump prices include Lagos, N950 per litre; Sokoto, N992 per litre; Oyo, N960 per litre; Kano, N999 per litre; Kaduna, N999 per litre; FCT, N992 per litre; Rivers, N980 per litre; and Borno, N1019 per litre.

READ ALSO:

The company said in line with the provisions of the Petroleum Industry Act (PIA), petrol prices are not set by the government, but negotiated directly between parties.

“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1st, 2024.

“The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100% to the general public.” the notice said.

NNPC hints petrol may rise above N1,000/litre, releases fresh price list

Continue Reading

Business

Dangote Refinery: Tinubu committee to announce petrol price on October 1

Published

7 hours ago

on

September 16, 2024

By

Dangote Refinery: Tinubu committee to announce petrol price on October 1

Dangote Group has responded to reports claiming that it sold premium motor spirit (PMS) to the Nigerian National Petroleum Company Limited (NNPCL) at N898 per litre, calling the reports “misleading and malicious.”

In a statement issued by Chief Branding and Communication Officer Anthony Chiejina, Dangote Group did not confirm the specific price at which the product was sold, only stating that it was sold in dollars.

Olufemi Soneye, the NNPCL’s chief spokesperson, had previously stated that the company purchased the PMS at N898 per litre, correcting an earlier report that suggested the price was N760 per litre.

READ ALSO:

Dangote’s statement criticized Soneye’s report as intentionally misleading, aimed at undermining the achievement of the Dangote Refinery’s recent milestone in addressing Nigeria’s energy challenges. The statement urged Nigerians to disregard the misleading claims and wait for the official price announcement from the Technical Sub-Committee on Naira-based crude sales to local refineries, which will be made on October 1, 2024.

The statement further emphasized that the refinery sold the product to NNPCL in dollars, offering significant savings compared to current import prices, and reassured that the refinery would help alleviate fuel scarcity across Nigeria by ensuring availability in every local government area.

Dangote Refinery: Tinubu committee to announce petrol price on October 1

Continue Reading

Business

JUST IN: Northern regions to pay more for petrol after NNPC announces Dangote price

Published

8 hours ago

on

September 16, 2024

By

Dangote Refinery, Aliko Dangote

JUST IN: Northern regions to pay more for petrol after NNPC announces Dangote price

The Nigerian National Petroleum Company Limited (NNPCL) has announced that petrol sourced from the Dangote Refinery will be sold at prices exceeding N1,000 per litre in northern Nigeria.

According to a statement by NNPC spokesperson Olufemi Soneye, the cost of petrol could reach N1,019 per litre in Borno State and N999.22 in cities such as Abuja, Sokoto, and Kano.

In contrast, the price for petrol in southern regions, including Oyo and Rivers states, will be approximately N960 per litre. Lagos and its surrounding areas will see the lowest price, set at N950 per litre.

The announcement, made in a statement titled ‘NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery Based on September 2024 Pricing’, provides an overview of the anticipated retail prices across the country.

“The NNPC Ltd has released estimated prices of Premium Motor Spirit, also known as petrol (obtained from the Dangote Refinery) in its retail stations across the country.

READ ALSO:

“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act, PMS prices are not set by the government, but negotiated directly between parties at an arm’s length,” he stated.

The company explained that the product it loaded on Sunday was paid for in dollars.

“The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as naira transactions will only commence on October 1, 2024.

“The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public,” the statement added.

He stated that the estimated pump prices of PMS were obtained from the Dangote Refinery and will be across NNPC retail stations in the country, based on September 2024 pricing.

Recall that the Dangote Group had disagreed with the NNPC on Sunday that it was selling PMS at N898, but it failed to release its price list.

JUST IN: Northern regions to pay more for petrol after NNPC announces Dangote price

(Punch)

Continue Reading

Trending