NLC and TUC have decided to suspend their protests over the removal of fuel subsidies for the weekend to enable talks with the government, and to enable people to stock up, and recharge themselves in readiness for the nationwide strike which will continue on Monday.
The mass action which has been on for the past five days has almost brought the economy to a halt and already cost the country close to $3bn, according to the central bank. If the main oil union(PENGASSAN) pursues its threat to start shutting down oil production come Sunday, the losses will be far greater. Worries over supplies due to the little economic activity witnessed since Monday have contributed to a rise in global oil prices in recent days. “Protests are suspended for the weekend . . . [The] strike is on until we get a settlement,” Isa Aremu, vice-president of NLC, told journalists on Friday.
Nigeria’s media speculated that the government might be willing to reintroduce the subsidy for a few months, albeit at a reduced level that would price petrol at about 100 or 120 naira a litre. The open market price was more than 140 naira at filling stations last week.
A phased withdrawal will give Mr Jonathan time to introduce concrete measures to ease the burden on the poor, rather than simply promise that the expected $7 billion a year saving to the government will be spent well, as he did when the subsidy was lifted. Analysts say he should also improve maintenance at local refineries, or even sign deals with private operators to build others.
Though Nigeria produces more than 2m barrels of oil a day, it imports most of its fuel because the state-run refineries are poorly maintained. The subsidy cost $8bn last year, a figure greatly inflated by corruption. Vast amounts of subsidised petrol flow across Nigeria borders to neighbouring countries where the pump price is far higher.
Deregulation of the oil sector is a key part of Mr Jonathan’s attempts to reform the economy.