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Nigerian Unions Threaten Strike Over Fuel Price Hike - 2003-10-08

Nigeria's labor unions say a general strike over fuel prices will start as scheduled on Thursday even as they continue to negotiate with the state-run oil company.

Panic buying and fuel hoarding is taking place as Nigerians prepare for what could be a long battle between unions and a government set on ending costly fuel subsidies.

Unions threatened the general strike Sunday, demanding the government scrap its fuel price hike. Union leaders complain that President Obasanjo has refused to discuss the issue with them.

The government, under pressure from international donors, says that subsidizing fuel is costing the state millions of dollars each year that could be better spent on development projects, and is causing inefficiency and corruption in the oil sector.

Cheap fuel is smuggled out of Nigeria for illegal sale in neighboring countries.

Fuel shortages are common, which creates opportunities for a large number of black market traders selling fuel out of gasoline cans at the road side.

The union leaders who are calling the general strike say it is out of the question that impoverished Nigerians should pay for reform through higher fuel prices.

The Nigerian state-controlled and state subsidized oil sector is undergoing a program of privatization. To attract investors, the government says changes have to be made.

A key problem is that Nigeria does not refine much of the crude oil that it uses. Though oil-rich, Nigeria imports most of the refined fuel that it consumes, selling it for less than the cost of importing it.

The government's arguments for privatization do not carry much sway with the Nigerian public. A previous general strike over the same issue in July saw businesses, banks and seaports shut for eight days, and sparked fatal clashes between police and protesters. That strike was only brought to an end when the government made a concession and reduced the proposed fuel price hike.

Nigeria is one of the world's top 10 crude oil exporting nations, but most of the population continues to live at subsistence levels.