High cost of Diesel slows Train services – NRC

The amount spent daily on fueling the trains that operate on the Lagos-Ibadan Train Service is 135.3 percent higher than what the Nigeria Railway Corporation earns from the sale of tickets reports have shown.

The situation has made the NRC to reduce the trips on its Warri-Itakpe and Lagos-Ibadan train services by half due to the hike in diesel price, as well as the negative impact on railway services caused by the March 28, 2022 bombing of the Abuja-Kaduna train.

The Managing Director, NRC, Fidet Okhiria, said in Abuja that though passengers were gradually returning, the March 28 incident did not only crumble the Abuja-Kaduna route, but made travellers to desert railways nationwide.

He said this was further worsened by the hike in diesel price, which had made it tough to operate rail services in Nigeria, as the NRC was spending more than twice of 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 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.”

Furthermore, he lamented that budgetary allocations were becoming insufficient.

“In the 2022 budget, the government provided about N500m for diesel, which barely lasts up to a month for rail services across the country.

However, the Corporation was also sourcing alternative funding, he added.

“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.”

The NRC boss stated that in order to reduce losses, the corporation had to check its operations to maximise what it had without causing pain to passengers.

“So, we had to reduce the number of trips by half on both Lagos-Ibadan and Itakpe-Warri train services and that is what we are still doing. This is because the revenue we earn cannot pay for the amount we spend on diesel presently,” he stated.

Punch/Hauwa Abu