Nigerian Railway Corporation (NRC) has revealed that it spent N4 million on diesel daily despite struggling to make N1.7 million in a day.
According to the corporation, the high cost of diesel in recent times has really affected the profitability of the railway corporation.
The corporation said it uses about 24,000 litres of diesel daily for the Lagos-Ibadan route, amounting to about N4 million while it barely makes N1.7 million a day.
This represents a cost-to-revenue ratio of 135.3 percent in favour of the cost. Besides, there are other costs incurred daily by the corporation.
In the words of the NRC Managing Director, Mr Fidet Okhiria, “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.” He stated.
Mr Fidet Okhiria further lamented that government allocation for the corporation in the 2022 budget is grossly inadequate to run operations.
He stated that the government provided about N500 million to purchase diesel for all rail services across the country which barely lasts up to a month.