The Nigerian Railway
Corporation (NRC) says it has reduced the number of trips on the Lagos-Ibadan
train service due to the hike in the price of automotive gas oil, better known
as diesel.
The development would affect the revenue drive of the sector as
rail transport contributed N6 billion last year.
Speaking with The Punch on
Tuesday, Fidet Okhiria, NRC’s managing director, said the corporation has cut
down the number of return trips on the route from six to two every day.
“The Lagos-Ibadan train service is running, but we have reduced the number of trips on that route because of the diesel problem. We reduced the number of trips we are running because of the hike in diesel price,” Okhiria was quoted as saying.
“We are now doing two
return trips as against six, which by now should have gone to 10. So we run
just two trips now due to the diesel problem.”
Despite the rising cost of operations, the NRC boss said it
was outside the corporation’s powers to hike fares.
He said the corporation had sent recommendations to the
federal ministry of transportation for an adjustment in the train fare.
“We just can’t
increase it by ourselves. The government has to do that. We have made some
recommendations. But even with the recommendations we made, the new price of
diesel has overshot our workings as contained in the recommendations,” Okhiria
said.
“However, we don’t want to price ourselves out of the market
too, because the price of petrol is not increasing as such, rather the increase
is little when compared to diesel price. And you know we are competing with
transporters on roads.”
In the last five months, the price of diesel has hit N800
per litre, representing a 28 percent increase — it sold for 625/litre in
March.
Luke Ofojebe, head of research, Vetiva Capital,
had said that the hike in diesel price was due to disruption in the global oil
market.
Ofojebe said the reason is that Nigeria still depends on
imported petroleum products from other advanced countries — and high oil prices
translate to high landing costs for the products.
He added that since petrol is regulated, its pump price will
remain relatively stable but will lead to high subsidy expenses on the part of
the government.
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