Lagos-Ibadan Train: Nigerian Railway Spends About N4 Million On Diesel Alone Daily, Makes N1.7 Million

The authorities of the Nigerian Railway Corporation (NRC) have said that whereas the Corporation barely earns up to N1.7m per day, it uses about 24,000 litres of diesel daily for the Lagos-Ibadan route, amounting to about N4 million.

NRC said that it spends 135.3 percent higher than what it earns from the sale of tickets to passengers daily on fuelling the trains that operate on the Lagos-Ibadan Train Service.

Sunday Punch reports that the NRC said it had 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 terrorists at on the Abuja-Kaduna train.

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

The MD was quoted as saying, “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 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 about N1,000 per 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.”

On how the NRC was sourcing funds to sustain its operations, Okhiria said, “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.”

On the March 28 Abuja-Kaduna train attack, the MD said, “Before, passengers had the confidence that train ride was the safest, but when that incident happened, it was a big blow to the rail industry. It is now that people are trying to build back their confidence. So, the volume of passengers has reduced.

“And, unfortunately, the war in Ukraine and other variables have made petroleum products’ prices to skyrocket astronomically. And being a service provider for the benefit of Nigeria, we cannot just wake up and increase fares. For even when you increase fares, you may price yourself out of competition.”

Okhiria further noted that in order to reduce losses, the corporation had to check its operations to maximise what it had without causing pain to passengers.

He said, “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.” 

“We are just trying to get support from other sources to be able to pay just for diesel, not to talk of payments for cleaning, security, among others. All those are also pending issues that will take a lot of money to maintain them.

“The Lagos-Ibadan trips were up to six in the past and by now we should be talking about 10 trips, if not for the problems. But now, we operate four trips on that service. On the Warri-Itakpe service, we are doing just two trips as against the four trips that we were doing before,” the NRC boss added. 

Sahara Reporters