Nigerian Unions threaten strike over fuel subsidy?

3 months ago 394

The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) are to embark on a nationwide strike starting on Thursday January 27, as a way of registering their displeasure over government’s initial plans to remove fuel subsidies.

Faced with a serious budget crisis, the government had initially proposed to abolish these decried subsidies, which siphon billions of dollars from public coffers every year but allow gas stations to sell gasoline at prices far below the market.

In December 2021, the two organisations (NLC and TUC ) announced nationwide protests against the increase of petrol pump prices.

Although the federal government seems to be reversing, or at least postponing, the plans to remove fuel subsidy, an extremely popular measure in Africa's most populous country the trade unions appear to want to exercise their democratic rights.

This is a highly sensitive and potentially explosive issue: Nigerian consumers consider access to cheap fuel to be one of the few privileges they enjoy from their poverty-stricken oil power.

Urging the NLC and TUC to call off the protests, Senate President Ahmad Lawan on January 24 said that the federal government was reconsidering the removal of the subsidy.

In November, Finance Minister Zainab Ahmed said she wanted to end this "unsustainable" measure by June, in line with the priorities set by the World Bank (WB) and the International Monetary Fund (IMF). But to buy social peace, the government finally announced a change of heart.

"It is clear that the timing is problematic, that there is still rising inflation and that the removal of subsidies would only worsen the situation and put more hardship on citizens," Ahmed told senators on Monday.

Since the 1970s, the federal government - which spends more on subsidies than on other key underdeveloped sectors such as education or health - has been paying part of the cost of petroleum products.

Currently, a liter of petrol costs an average of 165 naira (about 36 cents).

Over the past ten years, the authorities have tried to remove these subsidies several times. Each time, they have had to backtrack in the face of public anger, which has been whipped up by the unions.

In 2012, the army even took to the streets to maintain calm during huge demonstrations.

"I don't see any government, even the one that comes in after 2023, having the political will to change the system," said Cheta Nwanze, a researcher at Nigerian consultancy SBM Intelligence.

However, the World Bank has recommended that Nigeria put an end to it within the next six months to promote the diversification of its economy, which is mainly based on black gold exports.

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