ODD NEWS: Lagos-Ibadan Train Diesel Cost Exceeds Earnings By 135%

Fueling trains that operate on the Lagos-Ibadan Train Service is now 135.3% higher than what the Nigeria Railway Corporation (NRC) earns from sales of tickets to passengers.

The NRC has consequently reduced the trips on its Lagos-Ibadan and Warri-Itakpe routes by 50%, due to the increase in price of diesel and the negative impact of the 28 March 2022 bombing of the Abuja-Kaduna train.

Managing Director, NRC, Fidet Okhiria, told The PUNCH correspondent in Abuja on Fri 16Sep22 that, though passengers were gradually returning, the March 28 incident not only collapsed the Abuja-Kaduna route, but made travellers to desert railways nationwide.

Mr Fidet Okhiria, MD of NRC

He said this was further worsened by the hike in diesel price which made it tough to operate rail services, as the NRC was spending more than twice its earnings from ticket sales on the purchase of diesel.

He said, “The Abuja-Kaduna train bombing on March 28 has seriously affected us. The Abuja-Kaduna service was doing marvelously well. At a time, we were hitting N450m monthly revenue and by the time you remove all operational costs you’ll still have something to pay to the government.

“But now, we can hardly buy diesel to operate. In fact, the major headache now is the price of diesel. For instance, on average, we use about 24,000 litres daily for the Lagos-Ibadan service and we barely earn up to N1.7m per day.

“Now the supply cost for a litre of diesel is close to N1,000. At filling stations, you get it for about N700 to N800, but if you have a supplier, he will have to add his profit margin, VAT etc, and this brings the cost to bout N1,000/litre. So, we are talking about spending almost N4m on diesel alone, when we barely make N1.7m. But we still have to provide the services on that route.”

Asked to explain how the NRC was sourcing funds to sustain its operations, Okhiria replied, “In the 2022 budget, the government provided about N500m for diesel, which now barely lasts up to a month for rail services across the country.

“We also search for funds from other sources, such as property rents and others. So, we use those to augment what we earn from train services. See, it has been a serious headache, I won’t lie to you. It has been stressful and the NRC is owing for diesel, but we cannot stop.”

SOURCE
http://www.punchng.com

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