Africa

Nigeria fuel prices: Talks fail to reach agreement

A huge crowd at a rally in Lagos on Wednesday 11 January 2012 Image copyright AFP
Image caption Nigerians are heavily dependent on fuel to run generators because of the erratic power supply

Talks between the Nigerian government and trade union leaders have failed to reach a compromise over the removal of fuel subsidies.

However, the chief union negotiator said a threatened oil workers' strike would not go ahead at once.

The government removed a fuel subsidy two weeks ago, which led to a doubling of fuel prices, widespread protests and a week-long strike.

Strikes have already cost the economy billions of dollars in lost revenue.

'Devastating blow'

"The meeting is not deadlocked but we have not reached a compromise," Nigeria Labour Congress president Abdulwaheed Omar told reporters after the talks ended late on Saturday.

"We will meet and return to talk with the government. Our position is that they should suspend the increase in the pump prices and then we will suspend the strike and start negotiation," he added.

He did not say when another round of talks was planned.

However, Mr Omar said that an oil workers' strike planned for Sunday would not happen while talks with the government were continuing.

"We are taking this thing gradually. We are still giving peace a chance," said Mr Omar.

But the country's powerful trade unions had warned earlier that a nationwide strike - which was suspended for the weekend - would resume on Monday if a compromise was not reached before then.

A strike in the oil sector could affect the international oil markets because Nigeria is the sixth largest producer of crude oil in the world, the BBC's Mark Doyle in Abuja reports.

The removal of subsidies from 1 January caused petrol prices to more than double - from 65 naira ($0.40; £0.26) to 140 naira.

It was a devastating blow to the large number of Nigerians who live in absolute poverty, our correspondent says.

The authorities say the subsidy was costing the equivalent of more than $8bn a year, arguing that the money would be better spent on infrastructure and social services.

Oil accounts for some 80% of Nigeria's state revenues but after years of corruption and mismanagement, it has hardly any capacity to refine crude oil into fuel, which has to be imported.

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