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Lower oil prices....lead to 25pc decline in costs incurred

Saudi housing projects to gain from low oil prices

JEDDAH, December 26, 2014

Saudi Arabia’s Ministry of Housing projects are set to gain from lower oil prices leading to a decline of 25 per cent in costs incurred by customers, according to a report.

Businessmen pointed out that service projects have already been tendered for the next financial year at the new reduced prices, said the Arab News report.

The price decline has been attributed to the lower costs of oil derivatives and raw materials used in the industry, it said.

The kingdom’s Ministry of Commerce and Industry has imposed strict controls over imported goods and locally manufactured goods, which use imported raw materials, said the report.

The price of iron is expected to decrease between 20 and 30 per cent, while cement prices would achieve stability because of the large amounts available on the market, it said.

The low oil prices will have a positive impact on the construction industry, with it leading to low fuel prices and low prices of construction materials, Faisal Al-Aqeil, director of development in Al-Imar Company, was quoted as saying.

He pointed out that China had increased its iron production and was offering it at lower prices. As for cement prices, he said the price of fuel, an imported substance, that goes into the manufacturing of cement has gone down as a result of the decreasing oil prices, but the price of local cement is stable because of the large supplies.

Mahmoud Rashwan, member of the Madinah chamber and chairman of the commercial committee, said if oil prices keep falling, the price of land will decrease. He

This decrease will reflect positively globally with regard to costs and purchasing power, he added.




Tags: Saudi | Oil | project | prices | Housing | low |

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