Nigerian Unions, President Meet Over Fuel Subsidy Stalemate

Posted January 14th, 2012 at 2:40 pm (UTC-5)
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Nigerian union leaders are meeting with President Goodluck Jonathan for talks about the ending of consumer fuel subsidies.

The government's move to suspend the subsidies earlier this year has upset the nation, sparking a 5-day-long strike that helped paralyzed Africa's top oil exporting country. Tens of thousands of people have been taking to the streets to express their anger over the removal of consumer fuel subsidies that caused fuel prices to double.

Union leaders called a temporary halt to the strike in advance of Saturday's meeting with President Jonathan in Abuja, but have vowed to resume the strikes on Monday if the sides fail to make any progress.

Union leaders spoke before heading to the talks with the president and decided they would not back-off of their demands.

Already, one of Nigeria's major unions has said it will stop oil production in Nigeria if the government does not restore fuel subsidies — a move that could have an impact on the country's economy and affect global oil prices.

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

Nigeria exports more than two 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

The government eliminated the subsidy January 1. Talk that the strikes could cause the county's oil industry to shut down have since caused world oil prices to climb.

President Goodluck 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.

The United States said Thursday it was closely monitoring the situation. But State Department Spokesperson Victoria Nuland said the United States supports the right of Nigerians to protest peacefully. She said it was “incumbent on the government to encourage an environment that remains peaceful.”

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.