Nigeria bracing for fuel unrest

2005-08-26 09:24

Ade Obisesan - AFP

Lagos - Nigeria faced another round of protest strikes on Thursday after the government gave the go-ahead to the latest stage in a deeply unpopular plan to deregulate petrol and diesel prices.

Any strike action in Nigeria could provoke violent unrest and will unsettle international energy markets, which are fearful that protesting trade unionists could disrupt crude oil exports at a time when supply fears have already pushed world prices to record highs.

Officials have this week confirmed that the state oil monopoly can longer afford to import expensive refined fuels and sell them on to motorists at subsidised prices, triggering fears of an imminent price hike.

President Olusegun Obasanjo's government has long argued that a fully deregulated market, in which private suppliers could import fuel and pay to refurbish Nigeria's decrepit refineries, is the best way to ensure supply.

But most Nigerians regard cheap petrol as a birthright - their country exports 2.5 million barrels of crude per day - and bitterly oppose price increases.

Labour leaders warned on Thursday that they would mobilise a nationwide general strike in response to any price increases.

Meanwhile, queues began forming at service stations in major cities as motorists fuel and forecourt staff confirmed to AFP that they had begun hoarding diesel in the hope of selling it once prices have leapt up.

Owei Lakemfa, a spokesperson for the Nigeria Labour Congress, said the trade union movement would resist deregulation "in all ways that are legal and constitutionally available to us, including strikes and mass rallies".

"The country belongs to all of us and not just to a group of elected politicians. No group can hold us to ransom. We are not slaves in Nigeria and so we shall fight the fuel price increase with all the force we can muster."

Petrol and diesel currently sells for about 51 naira (R2.47) a litre in Lagos and other major cities, the rate at which it was capped by a government agency following a previous round of labour protests.

But with world oil prices at an all time high, the Nigerian National Petroleum Corporation (NNPC) has complained that it now spends 600m naira (R29.1m) a day importing fuel.

Officials and press reports have warned that the price at the pump may jump by 40% to 70 or 80 naira (about R3.65) a litre, low by world standards but a huge blow to consumers in a country where three-quarters live below the poverty line.

Nigerian exports have earned billions of dollars in excess revenue since world oil prices in recent months as prices recorded an average $65 a barrel for the first time ever.

But Obasanjo's government has embarked on an ambitious and internationally acclaimed programme of economic reform. It says it plans to spend the excess of paying down debt, building foreign reserves and improving public services.

Obasanjo has raised prices seven times since 1999 and previous strikes have paralysed the economic life of Nigeria's major cities and stoked violent unrest which has left dozens dead.

- AFP