Fuel strikes: Unions to meet Jonathan

2012-01-14 14:00
Abuja - Nigerian unions were to meet President Goodluck Jonathan on Saturday to try to defuse a row over the removal of fuel subsidies that has paralysed the economy and raised fears of a shutdown of its oil industry.

Strikes and protests brought the country to a standstill last week and workers in the vital 2 million barrel-per-day oil industry have threatened to halt production.

Unions will meet members' representatives in the capital Abuja at 14:00 on Saturday to agree a negotiating position ahead of talks with Jonathan at the presidency, said Owei Lakemfa, general secretary of the National Labour Congress.

"We'll review the situation of the past one week, and set a fresh mandate for those who would represent labour in the talks in the [presidential] villa today," he told Reuters.

Tens of thousands of people have taken to the streets and staged strikes for five straight days in protest against the removal of a fuel subsidy on January 01, which more than doubled the pump price to 150 naira ($0.93) per litre from 65 naira before.

Unions have suspended strike action for the weekend, pending talks on Saturday in which they and the government are expected to reach some kind of agreement. If they do not, strikes will continue next week.

"The government's expectation is that today's meeting will bring an end to the whole crisis so that the nation can move forward," a senior source at the presidential villa told Reuters.

Officially, the unions' negotiating position has been to accept nothing less than 65 naira, although they are expected to soften their stance.

One possibility is an agreement on a higher but still heavily subsidised price, which would leave the government with a continuing major burden on public finances.

Another is that the government agrees to reinstate the subsidy fully, but then aggressively phases it out from April, as was originally planned before the shock axing of it on January 01. That would be unlikely to please the unions.

Strike fatigue

"In the alternate scenario ... the two sides are unable to bridge the negotiating gap in so little time," said Eurasia Group's Philippe de Pontet in a research note late on Friday.

"This is both because of union intransigence and because factions around President Jonathan think the non-union participation in strikes will start to dissipate next week ... that strike fatigue will set in among ordinary Nigerians."

Central Bank Governor Lamido Sanusi told Reuters on Thursday the strikes were costing Africa's second biggest economy around $600m a day.

The confrontation is a serious setback for Jonathan, already under fire for failing to quell an increasingly violent Islamist insurgency in the north.

Most fuel price demonstrations have been peaceful but at least three protesters have been shot dead by police. A police officer has been arrested for shooting dead a man in Lagos.

Industry officials doubt unions can stop crude oil exports completely because production is largely automated and Nigeria has crude stored in reserves, but even a minor outage could have a significant impact on the economy.

Nigeria is a key supplier to the United States, Europe and Asia. Crude oil exports account for more than 90% of foreign exchange earnings and 80 percent of government revenues.

Read more on:    goodluck jonathan  |  nigeria  |  west africa
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