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 136.

    According to Professor Tam David West, General Buhari and others in the know, there is NO fuel subsidy in Nigeria in the sense the present government wants to fool Nigerians to believe and there has NEVER been. According to them the whole thing is one big fraud on the populace. These are former living Nigerian petroleum ministers and so should know what they are talking about.

  • rate this
    0

    Comment number 135.

    No road.no hospital,no food,no school,no electricity,no water. The only benefit we enjoy from our country has now doubled in price. Petrol to say. But the president can budget N1 billion naira to feed his family, N240 million to buy bullet proof cars. But to repair our refineries is a big problem. Corruption in high places. May God help us.

  • rate this
    -1

    Comment number 134.

    i wish my fellow country people will understand the escense of these removal of subcidy, i mean is for our future good, as old and as rich as our nation we dont care in developing order aspect lik our transport, education etc

  • rate this
    0

    Comment number 133.

    Just wanted to ask! Does the Nigerian government have no right to invest in their own refining plant? This could have alleviated higher costs in the long run....huge sum is needed to invest in the short run but overtime, costs will be reduced.

  • rate this
    +1

    Comment number 132.

    The removal of the fuel subsidy is ill advised. It is the most open of secrets that governance in Nigeria is riddled with corruption. Most legislators in both houses do not understand the meaning of the word 'subsidy'. It is unfortunate that another windfall is about to fall into the laps of venal 'lawmakers' and their cohorts. Grotesquely bloated stomachs and accounts are about to get even larger

  • rate this
    +1

    Comment number 131.

    For the first instant why is that Nigeria cannot refine their own petroleum. Let them remove corruption ratherthan removing subsidy. And IMF urging them to remove subsidy is insane because globalisation is endebting poor nations and making them more dependent on the west for so call aids. what benefit does African people get from their wealth and governments. It´s really a shame.

  • rate this
    +1

    Comment number 130.

    everybody who as ever got petrol in Nigeria knows the price fluctuates wildly as supply is disrupted and the black marketeers make a fortune out of the everyday person (who gets sold rubbish petrol/diesel mix that screws your engine up..). Sort out the supply issue and deal with the black market boys first.

  • rate this
    0

    Comment number 129.

    We have been talking about this "fuel subsidy" for years and we seem to just be going round in circles. Am just suprised that our "egg heads" including those in government keep on talking abour fuel subsidy. It is all about market forces at display in a market oriented economy. Fixing fuel prices by government is not the way to go. Let fuel prices fluctuate with crude oil spot market prices.

  • rate this
    0

    Comment number 128.

    One way to fund the subsidy is to tax the small segment of the population, the super rich that steal their money to acquire personal wealth. Introduce luxury car tax to discourage needless acquisition of luxury cars, and real estate tax on their countless numbers of residential buildings.

  • rate this
    +1

    Comment number 127.

    Looks like there is going to be a increase in scam emails from some imaginary government official.

    Why dont the Nigerians refine their own fuel, most Arab nations do for the benifit of their people? I remember getting fuel in Bahrain for 2.5p per gallon for my motor bike which took half a gallon, I told the forecourt attendant to keep the change.

  • rate this
    +2

    Comment number 126.

    No security, no light, no quality education no good road and if the revenues generated by the government for years can not make any meaningful impact on the average Nigerian, it is certain that the $8b will only increase the furniture allowance of the senators. if the government want to cut cost, they are several way they can save hundreds of billions in dollars without touching oil subsidy.

  • rate this
    0

    Comment number 125.

    Before Obasanjo introduced petroleum and other subsidies in the 70s, Our infrastructures and educational systems were fantastic.

    Not true. In the 1970s, NEPA (abbreviation for Nigerian Electricity Power Authority) was jokingly referred to as Never Eny Power Atall as power cuts lasted for days.. Obvoiously there has been little or no improvement.

  • rate this
    0

    Comment number 124.

    as a ghanaian i must say i got the rudest shock of my life when i heard that nigerians pay just $0.4 per litre of petrol. my dear brothers pls accept to pay the fair price if you want to see some kind of normalcy in your economy and stand firm against corruption in all its forms. being a crude oil producer does not automatically imply getting to use it for free.

  • rate this
    +1

    Comment number 123.

    Nigeria has to import refine petroleum product, because, the refineries are not producing enough, as they all belong to the government and no private investor would invest, where subsidy exists. The subsidy beneficiaries would not allow the refineries’ to work, because it is more profitable. Importation brings poverty and unemployment. Oil and agriculture should provide employment to Nigerians.

  • rate this
    0

    Comment number 122.

    there were complaints in Iran also when the fuel subsidies were reduced.

    The citizens there face hardships and high prices because of the massive sanctions imposed by the Yanks. A few of them made the point but the majority are over kill and serve only to make life extremely difficult for the regular people.

    Nigerians on the other hand have a hard life because of their own leaders.

  • rate this
    0

    Comment number 121.

    The subsidy removal seems to have had an immediate damning effect. However, if the estimated annual subsidy cost of $8bn were properly invested in e.g. improving the nation’s refineries, thereby increasing refining capacity, the fuel price hike would short-lived. Instead of protesting for the subsidy to be returned, the eradication of mismanagement & corruption should be the focus of protests.

  • rate this
    +1

    Comment number 120.

    IMF is bad news for Africa. It has always been. I don't how long it'll take our rulers to realize that. The countries that are pushing for these subsidy removal are countries in which there are many, many social safety nets, but in Africa, nada. Instead, the little they have is being taken away from them...Very sad indeed1

  • rate this
    0

    Comment number 119.

    It is a shame for we nigerians,exp. those of us who are in western world to think ill of the removeal.Is oil the only mineral resource that God placed in Nigeria?.Least of all, I ve hardly read a comment that is seen eco consquance of the affected areas in which this is been taken.(Niger Deltererns).Even in the Bible, it is clearly stated that man cannot live by bread alone.

  • rate this
    +2

    Comment number 118.

    110. Afripals
    Please do not mention God's name in vain. Why should God help you, is He responsible for your mess? You should go to the streets and protest, get rid of corruption and then hopefully, your country will have enough money to invest in infrastructure you guys do not have - like oil refineries. Do you know how much money your Govt loses out yearly? What a disgrace!

  • rate this
    -1

    Comment number 117.

    Africa's greatest producer of OIL and need to import refined petrol...hah what an absolute joke country in an absolute joke continent LOL..

 

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