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Last Updated: Monday, 30 June, 2003, 15:07 GMT 16:07 UK
Q&A: Nigeria's fuel strike
Nigeria's trade unions have called an indefinite general strike, demanding the reintroduction of fuel subsidies in Africa's biggest oil producer.

Following a similar strike earlier this year, the government reduced the scale of the fuel prices rises it had announced.

Why is the government determined to raise fuel prices?

The government spends some $2bn a year in subsidies designed to keep fuel prices low.

A litre of petrol used to cost 20 US cents. It now costs 30 US cents - still lower than most neighbouring countries.

Because of these price differences, petrol is often smuggled to neighbouring countries such as Niger and Cameroon - one reason for the periodic fuel shortages in Nigeria.

President Olusegun Obasanjo says he will use the $2bn to improve social services and education.

Sounds fair enough. Why are the unions so upset?

A 54% increase in the price of petrol has already led to increases in bus fares, as well as the prices of food, which has to be transported to shops and markets.

Although Nigeria is Africa's biggest oil producer, the average person earns just $290 a year.

They can ill afford huge prices rises.

But if Nigeria produces so much oil, why is petrol a problem?

This is exactly what most Nigerians think and is why the government has kept petrol prices low.

Nigerians also feel that they do not reap the benefits of the country's oil wealth and believe they should be far better off than they are.

But Nigeria imports most of its petrol, because it does not have the capacity to refine enough to meet its needs locally.

To make matters worse, Nigeria periodically suffers from shortages of fuel - the latest triggered by fears ahead of the strike.

Some also doubt that any money saved by ending fuel subsidies will actually filter through to schools and hospitals in this notoriously corrupt country.

Who is likely to win this battle of wills?

A difficult one.

Mr Obasanjo has been trying to end fuel subsidies since he was elected in 1999 and the unions have protested every time.

The president may feel that his re-election in April gives him the mandate to face down troublesome unionists.

But the opposition says the election was fraudulent and they could piggy-back on the fuel protests to cause real trouble for Mr Obasanjo.

The leader of the Nigeria Labour Congress, Adams Oshiomhole, says the strike could be called off if the scale of the price rises is reversed, raising the possibility of a compromise which could let both sides save face.




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