The Governor Akinwunmi Ambode led government of Lagos State has approved 20 to 50 per cent fare increase for BRT, LAGBUS and other franchise buses, with effect from March 1, 2017.
The Managing Director and Chief Executive Officer, Lagos Metropolitan Area Transport Authority, Abiodun Dabiri, made this known at a news conference on Monday at the Bagauda Kaltho Press Centre, Alausa, Ikeja, the state capital.
The company’s Managing Director, Mr Fola Tinubu, made the disclosure in an interview with the News Agency of Nigeria (NAN) in Ikorodu on Thursday.
Mr Tinubu said the hike was as a result of the increase in the cost of operations.
The company has maintained a fare of N75, N120, and N195 from Ikorodu to Mile 12, Fadeyi, and CMS, respectively, since it started operations in November 2015.
According to him, the company will introduce new fares which will take effect between the end of February and early March.
“We are going to increase our price because of the situation in the country, our cost has just gone through the roof,” Tinubu said.
“At this time last year, we bought 1.2 million litres of diesel monthly at N120 per litre, we are now buying at N260; tires that cost N70,000 each now go for N140,000.
“All the parts used for the buses are imported so they’ve all doubled or tripled in price, and we have no choice but to continue to buy them.
“So, in doing that we have to find a way to make it work because you all know that the buses were bought in China; so, we have a foreign dollar component in our debt portfolio.”
“When we bought the buses it was N168 to a US dollar and now we are talking of N470 and we still have to pay the dollar component back.
“So, our debt has increased and our cost of operation has gone through the roof, and we have managed to keep the pricing same for now.
“In fact, right now, we are subsidising every person we carry, and if you are running a business, you can only do that for so long.’’
He said though the company was aware of its social responsibility, but the increase in fares was inevitable if its bus services were to be kept on a sustainable footing.
“The airlines have increased theirs between 200 per cent and 300 per cent but we will not even do 100 per cent.
“So, it is going to be something manageable for people. I will try not to put a figure to that now because the governor still has to approve it, and I don’t want to pre-empt him.
“What I can say is that it’s going to be a marginal increase and not a drastic increase and still less than what the commercial bus operators are charging right now.
“We are not even going to be close to that; but there is no other solution to it because if we do not, it is going to be recipe for disaster down the road,” Mr. Tinubu, added.