According to information gathered on Tuesday, the Nigeria Railway Corporation was compelled to lower the number of journeys on the Lagos-Ibadan Train Service by approximately 66.67% due to the increase in diesel price.
Additionally, it was discovered that the firm had recommended a change in the transit fare for the rail service to the Federal Ministry of Transportation.
The service was still operating, but trips had been cut back because of the ongoing increase in the price of diesel, according to the managing director of NRC, Fidet Okhiria.
Diesel prices have increased by more than 300% in recent months, causing transporters of gasoline, who use diesel to power their vehicles, to threaten a strike before the Federal Government stepped in.
Since many truck owners could not afford the high cost, the rise in diesel prices also caused some level of petrol scarcity in Abuja and surrounding states. This event prompted the Federal Government to increase the bridging claims being paid to petrol transporters.
Okhiria informed our reporter that the NRC had to reduce its trips, notably on the Lagos-Ibadan route, when discussing the effects of the high cost of diesel on the rail sector.
“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,” he stated.
The boss of the NRC said that it was not within the corporation’s purview to increase fares when asked whether the NRC would boost its transportation fares in response to the rise in the price of diesel.
While noting that the NRC had provided recommendations for changes, he clarified that the Federal Government was responsible for making this decision.
Okhira declared: “We just can’t increase it by ourselves. The government has to do that. We have made some recommendations. But even the recommendations we made, the new price of diesel has overshot our workings as contained in the recommendations.
“However, we don’t want to price ourselves out of 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.”
The NRC boss responded, “We are now performing two return trips as opposed to six, which at this point should have gone to 10,” when asked how many trips were now being made on the route. Due to the diesel problem, we are only doing two trips right now.
In their most recent economic bulletin published in August 2022, analysts at Financial Derivatives Company predicted that Nigeria’s headline inflation rate would increase once again to 19.7% due to the spike in diesel prices, among other causes.
“The official headline inflation for July will be released on August 15. Our Lagos market survey and econometric model are indicating that there will be another surge of 1.1 per cent in headline inflation to 19.7 per cent,” they stated.