NIOB condemns increase in petrol price, electricity tariff

TRACKING___The Nigerian Institute of Building NIOB, has lamented the recent increase in electricity tariff and price of premium motor spirit, otherwise known as petroleum by the federal government, saying these increases would to high cost of building materials in the country with grave implication on the nation’s industry.

In a statement by the Institute, NIOB President, Kunle Awobodu, said “The construction industry engages a lot of actors, including professionals, artisans, and business organisations such as contractors, manufacturers of building materials, equipment manufacturers or leasing organisations.

“Many of the organisations are small medium enterprises that remain the engine room of growth in national economies. The use of the construction industry to grow national economies cannot be overemphasised.

“A cursory survey of some building materials would reveal that many are closing shops on account of high cost of production combined with the harrowing effect of the COVID-19 pandemic. Increasing cost of energy will further asphyxiate the few that are still surviving. The implication of this scenario on our housing stock for example, is better imagined.

“The government or any other stakeholder may stimulate a scenario for the production of some inputs such as doors for large number of housing projects.

“A stockist may be exposed, as the capacity to even meet those elementary needs would be seen to remain low. Meanwhile, what the nation needs at this time, is ability to look inwards in line with the government’s espoused policy pronouncements and executive orders on local content.

“Bringing to fore the NIOB past market survey, a 50kg bag of cement rose from N1,600 to N2,000 and steel reinforcement bars ( locally manufactured TMT) from N135,000 to N140,000 due to hike in fuel prices from N65 to N120 per litre in 2012.

“The increase in fuel price from N120 to N145 in 2016 resulted in the rise of cement price to N2,300 per 50kg bag and steel bars to N180,000 per tonne.

“Just before this current upward review of fuel price to about N151.56, a 50kg bag of cement sold for N2,600 while steel bars was N230,000 per tonne. Sadly, these two prominent building materials are being manufactured locally, thereby questioning the rationale behind backward integration and local content policies.

“From the NIOB archive, hikes in fuel prices always led to price increases in building materials. Hence, it does not require a Nostradamus to predict inflation in the prices of building materials with the latest increase in fuel price. Invariably, workers who have been saving to relocate to their own houses will still have to tolerate their landlords for a long time to come.

“Increasing electricity and petroleum costs will further drive up production, distribution and transportation costs. The disposable incomes and purchasing power of Nigerians are further reduced. Without appreciable construction activities, employment challenges remain hydra-headed.

“It is our considered view that reversing the recent increases will do the critical masses and Nigeria’s economy and, especially the construction industry good. Increased construction activities will benefit both the government and the citizens”, Awobodu noted.