News / Africa

Nigerian Unions, Government Fail to Resolve Oil Subsidy Stalemate

A protester carries a placard on the second day of a protest against a removal of fuel subsidies in Lagos, January 10, 2012.
A protester carries a placard on the second day of a protest against a removal of fuel subsidies in Lagos, January 10, 2012.

Nigeria's labor unions say a nationwide strike will resume Monday if no deal concerning fuel prices is reached through negotiations with the government.

Union representatives of the Nigeria Labor Congress and Trade Union Congress Union also announced Sunday they have backed off an earlier threat to stop oil production.

In the first of two meetings Saturday, union leaders held talks with President Goodluck Jonathan and other officials about the ending of consumer fuel subsidies, which came into force January 1. After hours of wrangling, both sides said the meeting ended without a compromise.

The unions want the government to return fuel prices to the levels before the $8 billion subsidies were eliminated at the beginning of this month.

Union leaders called a temporary halt to the strikes in advance of Saturday's meeting with President Jonathan in Abuja.

The government's decision to end fuel subsidies has caused fuel prices to double and led to increases in food and transportation prices.  Tens of thousands of people have been taking to the streets to express their anger.   Last Monday, workers unions started a 5-day-long strike that virtually paralyzed Africa's top oil-exporting country.  

In the meantime, many Nigerians have been rushing to stores and markets to stock up on food, but many were confronted by food prices that had tripled in some cases.

Nigeria exports more than 2 million barrels of crude oil a day.  Experts say it is not clear how much production would be affected by a strike, since much of the process is automated, but even a minor disruption could have an impact on the country's economy and affect global oil prices.

President Jonathan and his government eliminated the fuel subsidy on the grounds that Nigeria can no longer afford the $8 billion program.  Mr. Jonathan has promised to use the money on infrastructure and social programs.

Most Nigerians live on less than $2 a day and the fuel subsidy was one of the few benefits they received from the country's oil wealth.

Some economists have said the subsidy was wasteful, but protesters have alleged that government corruption and mismanagement are responsible for the oil-rich nation's sustained poverty.

Some information for this report was provided by AP and AFP.

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