Nigeria unions to resist 'criminal' fuel price hike

Filling car with fuel in Lagos, Nigeria. 10 April 2016 Image copyright AFP
Image caption Due to widespread shortages, many people get their fuel on the black market

Nigeria's trade union federation has said it will resist what it calls the "criminal" 67% rise in the petrol price, as fuel subsidies are removed.

The government announced on Wednesday that the price was to increase in a bid to ease crippling fuel shortages.

The Nigeria Labour Congress (NLC) said the rise from 86.5 naira ($0.43) a litre to 145 naira should be reversed.

In 2012, the government was forced to back down on a similar price rise after nationwide protests.

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The subsidy, which has kept the price low, costs the government $2.7m a day and there is no provision for it in the recently approved budget for this year, the petroleum ministry said in a statement.

Recent fuel shortages have seen Nigerians paying up to 350 naira a litre on the black market, it added.

The subsidy has also encouraged corruption with the government often paying for more fuel than Nigerians use, says oil analyst Neil Ford.

Image copyright AFP
Image caption Protests in 2012 led the government to back down from its plan to end the fuel subsidy

Despite being one of Africa's largest oil producers, Nigeria has to import fuel to meet demand as its refineries are dilapidated and work at a fraction of their capacity.

Petroleum Minister Emmanuel Ibe Kachikwu said that the price rise should stabilise the market and help end the fuel scarcity.

But "even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa," he added.

He also argued that increased competition in the sector will drive prices down.

One of the reasons behind the scarcity has been the shortage of US dollars held by the central bank that importers could use to buy the refined fuel.

As well as dropping the subsidy, the government has announced that importers can now buy dollars from other sources.

On the ground - Isa Sanusi, BBC Africa, Abuja

Image copyright AFP

Some fuel stations in Nigeria have already begun to sell petrol at prices dictated by the market.

Many here in the capital, Abuja, started last night after the announcement that the subsidy had been scrapped.

Only filling stations owned by the state-run NNPC firm are selling at the old price until they exhaust their current stock.

And fuel is likely to be even more expensive in northern Nigeria because of the cost of transporting it there.

In January, International Monetary Fund chief Christine Lagarde urged Nigeria to drop the subsidy saying that it encouraged corruption and does not "help the poor".

But the NLC has argued that given the other economic difficulties ordinary Nigerians are facing, "the least one had expected... was another policy measure that would further make life more miserable".

It added that its national executive will be meeting on Friday to decide exactly what action to take.

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