Despite only making up to N1.7 million per day, the Nigerian Railway Corporation (NRC) claims that it consumes roughly 24,000 liters of diesel for the Lagos–Ibadan route per day, costing about N4 million.
According to NRC, it spends 135.3 percent more on fueling the trains that run on the Lagos-Ibadan Train Service each day than it makes from the sale of tickets to passengers.
According to Sunday Punch, the NRC stated that it had to cut the number of trips on its Warri-Itakpe and Lagos-Ibadan train services in half due to the increase in diesel prices as well as the harm that the March 28 terrorist attacks on the Abuja-Kaduna train brought to railway services.
The March 28 Abuja-Kaduna incident not only destroyed the Abuja-Kaduna line, but also forced travelers to desert rails all over the nation, according to NRC Managing Director Fidet Okhiria, who was speaking to an Abuja newspaper.
The MD was cited as stating, “The March 28 bombing of the train between Abuja and Kaduna has significantly damaged us. The Abuja-Kaduna service was operating fantastically. When all operational costs are subtracted, there is still money owed to the government during the time when we were hitting N450m every month.
“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 liters 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.”
In response to a question on where the NRC was getting the money to keep running, Okhiria stated, “In the 2022 budget, the government budgeted about N500m for diesel, which hardly 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.”
The MD stated the following in regards to the attack on the train between Abuja and Kaduna on March 28:
“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 added that in order to minimize losses, the company needed to examine how it operated in order to make the most of what it had without endangering passengers.
He stated “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.