Nigeria fury as fuel prices double after subsidy ends

 

Protesters took the streets in Abuja to vent their anger over the removal of the fuel price subsidy

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Ordinary Nigerians and trade unionists have condemned the government for withdrawing a fuel price subsidy which has led petrol prices to more than double in many areas.

The BBC's Chris Ewokor in the capital, Abuja, says many Nigerians are angry at the announcement, fearing the price of many other goods will also rise.

There have been small protests and the trade unions have called for a strike.

Nigeria is Africa's biggest oil producer, but imports refined petrol.

Years of mismanagement and corruption mean it does not have the capacity to refine oil, turning it into petrol and other fuels.

Analysts say many Nigerians regard cheap fuel as the only benefit they get from the nation's oil wealth.

Nigerian petrol station (02/01/12) Many petrol stations were closed early in the morning, while awaiting the new prices

Several previous governments have tried to remove the subsidy but have backed down in the face of widespread public protests and reduced it instead.

The IMF has long urged Nigeria's government to remove the subsidy, which costs a reported $8bn (£5.2bn) a year.

'Remove corruption, not subsidy'

Our correspondent says that early in the morning, many petrol stations in Abuja were closed as the owners were not sure what price they should charge, but they have since opened.

Nigeria's fuel prices

  • Previous price in petrol stations: $0.40/ litre
  • New price in petrol stations: $0.86
  • Previous black market price: $0.62
  • New black market price: $1.23
  • Annual cost to government of subsidy: $8bn

Prices have increased from 65 naira ($0.40; £0.26) per litre to at least 140 naira in filling stations and from 100 naira to at least 200 on the black market, where many Nigerians buy their fuel.

There are reports that petrol prices have tripled in some remote areas, while commuters have complained that motorcycle and minibus taxi fares have already doubled or tripled.

Some 200 people have gathered in central Abuja, chanting "Remove corruption, not subsidy."

They are being watched by a large contingent of soldiers and armed police.

There are also reports of protests in the main northern city, Kano.

Announcing the end of the subsidy on Sunday, the government urged people not to panic-buy or hoard fuel.

"Consumers are assured of adequate supply of quality products at prices that are competitive and non-exploitative," it said in a statement.

The government recently released a list of the biggest beneficiaries of the subsidy, who include some of Nigeria's richest people - the owners of fuel-importing firms.

Nigeria's two main labour organisations, the Trades Union Congress and the Nigerian Labour Congress, issued a joint statement condemning the move.

"We alert the populace to begin immediate mobilisation towards the D-Day for the commencement of strikes, street demonstrations and mass protests across the country," the statement said.

Nigerians try to sell fuel on the black market during a strike in 2004 Many Nigerians buy their fuel on the black market

"This promises to be a long-drawn battle; we know it is beginning, but we do not know its end or when it will end."

"We are confident the Nigerian people will triumph," it said.

Labour activist John Odah told the BBC's Network Africa programme that, judging from past experience, he doubted that the government would use the money saved by removing the subsidy to help ordinary people.

He said that the subsidy should have been retained until Nigeria's refineries had been brought up to scratch.

"As an oil-producing country, we ought not to be importing fuel in the first place," he said.

He also pointed out that Nigeria does not have many commuter railways, so people have little choice but to use motorcycle and minibus taxis, whose prices are closely linked to the price of petrol.

Fuel smuggling

Nigeria is Africa's biggest oil producer but most of the available 2 million barrels per day are exported in an unrefined state.

The country lacks refineries and infrastructure so has to import refined products such as petrol, which is expensive.

However, with the price of fuel much cheaper in Nigeria than in neighbouring countries, the subsidy led to widespread smuggling.

Nigerians are heavy users of fuel, not just for cars but to power generators that many households and businesses use to cope with the country's erratic electricity supply.

The government finance team led by respected pair central bank governor Lamido Sanusi and Finance Minister Ngozi Okonjo-Iweala have long argued that removing the subsidy would free up money to invest in other sectors and relieve poverty.

IMF head Christine Lagarde recently praised Nigeria's attempts to "transform the economy".

However, correspondents say the measures just announced could add to the difficulties faced by Nigerian President Goodluck Jonathan, who declared a state of emergency on Saturday in areas hit by Islamist violence.

 

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  • rate this
    0

    Comment number 36.

    Honestly , this is BS. How can u double the price of gas overnight. Claiming the removal of the subsidy would eventually help the poor is a complete BS. look, this is a way the corrupt government would enrich themselves with 8 billion dollars. you wanna help the poor , further cut the price of gasoline, that is how to help the poor Nigerians.I use to like president Good-luck Jonathan, NOT ANYMORE.

  • rate this
    0

    Comment number 35.

    I'd like to ask those talking of "efficiency", "consumption", "subsidies": do you think that the Middle Ages, the hardship of European peasants, would ever have ended if people back then bought the tripe from people like King John and Marie Antoinette, saying that all that was needed was the people had to make even more sacrifices?

    The wealthy will always construct a self-serving mythos.

  • rate this
    +1

    Comment number 34.

    @Mr Sudo Name, I'm not being narrow-minded, I'm being cynical, ignorance would be the unwillingness to learn, I am willing to learn, and what I have seen come out of Nigeria so far is corruption, drugs, prostitution, huge amounts of hi-tech crime, and more recently Boko Haram blowing people up.

    Could you kindly enlighten me on what these people are doing to help themselves? apart from crime...

  • rate this
    -1

    Comment number 33.

    Some people, either naive, or posting on behalf of an institution, try to make it sound like Nigerians are laughing all the way to the bank on fuel subsidies, or are reason for Nigeria's low efficiency, or that they are "illegal", implying law based on legitimacy.

    Most Nigerians get by with a standard of living below that of homeless people. This is oppression of the poor and weak plain & simple

  • rate this
    +2

    Comment number 32.

    The tribulations of life for the average person in most of Africa makes our European woes pale into insignificance. So many countries, so few real democracies. Even when not under a dictator, corruption is a part of life. There are a few shining beacons, like Cape Verde and Botswana, but even in Kenya, to get anything done, it is best to know which palms to grease.

  • rate this
    +3

    Comment number 31.

    Nigerian needs a change in mind set and produce more freethinkers. Constitution needs to change to challenge corrupt leaders to a court of law that is Independent of the government. Simple infrastructures like running water, electricity, good healthcare system, progressive educational system, trust-worthy security. Nigeria is great place to live but its Citizens have to stand up for themselves.

  • rate this
    -4

    Comment number 30.

    Has anyone told these people communism ended over 20 years ago? How did a country survive an 8billion dollar susidy to fuel private vehicles for so long? And tomorrow, the same labour unions will stand up and start asking for the same salaries as workers in Europe and America. Do they realize every economy is now global and this kind of subsidy could actually be illegal?

  • rate this
    0

    Comment number 29.

    Oh Mr Richard Gledhill, again you are being narrowminded. Off course there are people driving nice cars anywhere in the world. They are the well to do people. But the question is how many percent of them compare to the whole population? Mr Richard, wake up and see the outside world.

  • rate this
    +1

    Comment number 28.

    It is interesting to see that several Nigerian respondees consider they have a right to never-ending fuel subsidies. Surely, in any country, whether wealthy or poor, it is most important that taxes are spent first on providing basic services, such as education and health?

    An expectation that taxes are for subsidising people's current consumption bodes badly for any country.

  • rate this
    -2

    Comment number 27.

    It's easy to compare the price of fuel in the Uk to the price in Nigeria. I Just did it. This is an article on the BBC news website, you know, British Broad Casting, where the majority of readers are British, and see no need to cry about fuel being 84p a litre CHEAPER than what we pay for the damn stuff.

    If the people of Nigeria have nothing, and wages are so low, WHY ARE THEY ALL RUNNING CARS?

  • rate this
    +6

    Comment number 26.

    I don't think it is a good idea to demand reversal of the policy on fuel subsidy removal, rather we should demonstrate for a corrupt-free Nigeria. Let all those we suspect to be corrupt be brought to justice immediately, that should be our single demand. Considering the multi-ethnic make up of Nigeria, it will be difficult for the government refineries to work efficiently because of nepotism.

  • rate this
    -1

    Comment number 25.

    The IMF finds another way to squeeze the poorest and weakest so the richest and most powerful can benefit.

    The list says the subsidy benefits the richest. How? Sounds like typical self-serving BS "research" created by corporate think tanks.

    Action the corruption that benefits the oil firms, or the subsidy that benefits the people who live in the country that sits on the oil?

  • rate this
    +1

    Comment number 24.

    I agree with Paul6679, such ignorance is very pathetic. The purchasing power is what matters, not the actual amount. Nigerians already paying a high price for food, transport etc with no real infra in place even in Lagos, the biggest city in the country. And still they are trying to survive. Increasing the fuel by more than double overnight is unbelievable. How much more can the Nigerians bear?

  • Comment number 23.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 22.

    It will be interesting to see how the Nigerian people react to this. It may give us an insight in to how we will handle ever increasing prices as oil resources dwindle.

  • rate this
    -2

    Comment number 21.

    If the Nigerian government is bad, had does it compare to the UK government and its petrol prices?

  • rate this
    -5

    Comment number 20.

    16.tuma2
    13 Minutes ago
    ////
    Don't worry soft touch Britain will still pump millions of £ in "aid" into corrupt Nigeria.

  • rate this
    +7

    Comment number 19.

    All you people saying welcome to the real world have no idea of what their world is having worked and lived there I can tell you they have nothing and get nothing you are either very rich or very poor.

    When you consider the average monthly wage if you are lucky enough to have found work is less than $100 this has a big impact on their lives, I would challenge anyone to live on what they do

  • rate this
    +1

    Comment number 18.

    How can you compare the cost of fuel in the UK with the cost in Nigeria. The comment from Richard gledhill is just plain ignorance. Have you not considered the fact that the average income in Nigeria is less than a tenth of the UK.

  • rate this
    +2

    Comment number 17.

    I USED TO THINK THAT NIGERIANS ARE A BIT SMART BUT NOW I REALIZE IT'S THE OPPOSITE............................

 

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