The hike in the price of diesel has forced the Nigeria Railway Corporation (NRC) to reduce the trips on its Warri-Itape and Lagos-Ibadan trains service by half.
According to the Managing Director, Fidet Okhiria, in an interview with PUNCH, the March 28th bombing of the Abuja-Kaduna train impacted negatively on the railway services with travellers deserting the railways nationwide.
He added that the hike in diesel worsened the current situation, as the NRC spends more than twice its daily earnings from ticket sales on the purchase of diesel, which has made it tough to operate rail services in Nigeria.
He noted that the rail service spends almost four million naira on diesel but rarely makes N1.7 million from the trip.
His words: “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 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 the 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 the filling stations, you get it for about N700 to N800, but if you have a supplier, he will have to put his profit margin, VAT and others, 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”, he added.
When asked about how the NRC was sourcing funds to sustain its operations, Okhiria replied, that the Federal Government in the 2022 budget provided about N500 million for the diesel.
“In the 2022 budget, the government provided about N500m for diesel, which 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 it to augment what we earn from the 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”, Okhiria stated.
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