LAGOS, Nigeria — After a week of strikes, protests and national
paralysis over a sharp rise in the government-controlled price of fuel,
President Goodluck Jonathan on Monday announced a partial rollback of gasoline prices.
In a speech on the state-run Nigerian Television Authority, he said that
the price will drop to about $2.75 a gallon but still higher than
$1.70, which Nigerians had been paying before the government eliminated
subsidies on Jan. 1 in a highly unpopular decision.
After the announcement, Nigeria’s main labor unions said they would suspend their general strike, Reuters reported.
Citing a desire to put public finances on a sounder footing, the
government revoked the fuel subsidy on Jan. 1, a step that filled the
streets of Nigerian cities with tens of thousands of protesters all last
week. The police used live ammunition to disperse protests in Kano and
other places; at least three people were killed, and Amnesty
International denounced what it said was excessive use of force by the
authorities.
Nigerians emerged from their homes this weekend to find the fragile
calculus underpinning most people’s lives in the country further
threatened.
The price of onions has more than doubled because of the cost of getting
them to market. Dried crawfish, hot peppers and watermelon seed are
twice as expensive. Lines of cars stretched far down dingy blocks in the
gray winter haze, waiting to pay about $3.50 a gallon for gasoline that
cost just $1.70 on New Year’s Eve.
The standoff among the Nigerian government, the labor unions and the
street continued Sunday, with vows of more strikes unless the government
backed down.
At the grimy Iddo Market in Lagos, a long line of rickety open stalls
under a highway overpass, the mood over the weekend was wary. Housewives
bustled about the piles of yams and tomatoes for the first time in a
week.
“Everything is just double, triple the price,” said Segun Nisi, shaking
her head over the cost of watermelon seeds, whose oil is used in cooking
here. Similar reactions boded ill for the government’s policy course.
Nigeria produces immense oil wealth, but analysts say that for decades,
billions of dollars from the country’s oil earnings have been stolen by a
corrupt elite while three-quarters of the country’s citizens live on
about a dollar a day. Government-subsidized gasoline has been almost the
only benefit from oil production to reach the wider population.
Some local commentators saw the widespread protests over fuel as the
beginning of a “Nigerian Spring.” But they were another headache for a
country that is already faced with an insurrection by armed Islamic
militants in the north, sectarian tensions in the middle and perpetual
restiveness in the oil-producing south. At Iddo, Mrs. Nisi was dressed
up for shopping — a shiny white blouse, embroidered black cap — after a
week of closed stores and markets. But the experience was not making her
sympathetic to the government’s plan. And the seed vendor was not
budging from his new price. “We are just suffering here, and the people
at the top are enjoying their life,” Mrs. Nisi said. “They are just
making people too crazy.”
Even the country’s oil workers threatened to strike, which could affect
world energy markets if the country’s exports are crimped. One analyst
said a strike lasting several weeks could push up oil prices by $10 to
$20 a barrel.
At the root of the trouble is a paradox that some see as emblematic of
the country’s 50 years of independence: Nigeria is one of the world’s
leading crude oil exporters, but it must import nearly all of its
gasoline from foreign refineries because years of neglect, mismanagement
and corruption have left the country’s own refineries unable to
function. The government subsidies, which approached $8 billion, made up
the difference between the world market price and the lower price that
Nigerians had been paying at the pump, while the middlemen who imported
the gasoline made huge profits.
In a 2009 report, the International Monetary Fund called the removal of
the fuel subsidy “an important first step.” But in a place where experts
estimate that $50 billion to $100 billion in oil revenue has been lost
through fraud and that 80 percent of the economic benefit from oil
production has flowed to 1 percent of the population, the monetary
fund’s approval of a step that hits ordinary people so hard looks
provocative.
At Iddo, Mabel Ekewke eyed five small baskets of onions. Before, they
would have cost about 1,000 nairas (about $6.25), she said; now the
vendor was asking 2,500 nairas ($15.50).
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