Nigerian leader Goodluck Jonathan defends fuel cut

Fuel hike protesters pass a soldier in Abuja, Nigeria, 6 January The fuel price hike has generated street protests in the capital Abuja

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The President of Nigeria, Goodluck Jonathan, has gone on TV to defend his removal of fuel subsidies in Africa's largest oil-producing nation.

"I have no intention to inflict pains on Nigerians," he said on Saturday evening, arguing that the cut was in the "best interest of all Nigerians".

He also promised to cut top government salaries and ban all but essential international travel.

Unions have called an indefinite general strike, to start on Monday.

Mr Jonathan removed the subsidies on 1 January as part of a government austerity drive and a push to end corruption in the domestic fuel sector.

Petrol prices more than doubled in response and there have been angry street protests.

'Deregulate and survive'

"If I were in your shoes at this moment, I probably would have reacted in the same manner as some of our compatriots, or hold the same critical views about government," Mr Jonathan said in his TV address.

Start Quote

Either we deregulate and survive economically, or we continue with a subsidy regime that will continue to undermine our economy and potential for growth, and face serious consequences”

End Quote President Goodluck Jonathan

But, he told Nigerians: "We must act in the public interest, no matter how tough, for the pains of today cannot be compared to the benefits of tomorrow."

The deregulation of the petroleum sector was, he insisted, the best way to curb corruption and ensure the survival and growth of the economy.

"The truth is that we are all faced with two basic choices... either we deregulate and survive economically, or we continue with a subsidy regime that will continue to undermine our economy and potential for growth, and face serious consequences."

He said that top government officials would, from this year, take a 25% pay cut, and foreign trips would also be reduced.

Although Nigeria is Africa's biggest oil exporter it has not invested in the infrastructure to produce refined fuel, so has to import much of its petrol.

Many Nigerians regarded the government fuel subsidy - in place until the start of 2012 - as the only benefit they received from the country's vast oil wealth.

Most of Nigeria's 160 million people live on less than $2 (£1.30) a day, so the sharp price increases have hit them hard.

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

The government says it will spend the money it saves on improving health, education and the electricity supply.

The strike planned to begin on Monday has echoes of a nationwide action in 2003 that saw Nigeria almost entirely shut down.

"The government does not have credibility," said Adeola Adenikinju, an economics professor at the University of Ibadan who has long supported ending the fuel subsidy.

While the strike is expected to affect oil workers too, industry sources do not expect the industrial action to significantly affect crude exports, Reuters news agency reports.

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