Nigerian labour unions said they would resume nationwide strikes on Monday, crippling the second largest economy in Africa, after failing to reach a compromise with the government over scrapped fuel subsidies.
However, the main oil union said it was maintaining the output of Africa’s No. 1 crude producer, not joining walkouts for the time being, and the government said more talks would be held on Sunday despite the unsuccessful round the day before.
“There will be further negotiations today. The government is still open for dialogue. Further consultations will carry on today and by the evening something definite will have to come out,” presidential spokesman Reuben Abati told Reuters.
Tens of thousands took to the streets for strikes over five successive days last week in protest against the removal of a fuel subsidy on January 1 that more than doubled the pump price of petrol – to 150 naira per litre from 65 naira.
“The talks between the Federal Government and Labour represented by the Nigeria Labour Congress and Trade Union Congress in Abuja on Saturday stalled due to differences on the methodology in finding a solution to the crisis,” Nigeria’s two biggest unions said in a statement.
“The indefinite strikes, rallies and protests continue nationwide from Monday,” it said, but adding: “The Labour Movement pledges that whenever and wherever government invites us for talks, we shall be there without any conditionality.”
However, in a possible move to coax concessions from the government, NLC President Abdulwaheed Omar said PENGASSAN, the oil workers union, “will not shut down oil production, as earlier planned for Sunday”.
Previously, workers in Nigeria’s 2 million barrel-per-day oil industry, which accounts for 8 percent of U.S. oil imports and is an important source of energy supply in Europe and Asia, said they would cut output if talks broke down, intensifying pressure on President Goodluck Jonathan and his team.
Crude exports account for more than 90 percent of Nigeria’s foreign exchange earnings and 80 percent of government revenues.
Unions said they wanted the government to immediately bring the price back down to 65 naira, at which point they would cancel strikes and protests and negotiations could continue.
The government has been quiet on the details of negotiations, but slashing the pump price to 65 naira without any guarantee of subsidies being removed in the future would be a major climbdown, relinquishing its biggest bargaining chip.
Unions said the government appeared willing to reduce the petrol price but not to return it to subsidised levels.
Workers had suspended strike action for the weekend because of Saturday’s talks and to allow protesters to rest. Unions intend to have internal strategy meetings on Sunday.
Although the protests were mostly peaceful last week, several people died in clashes with police and 600 were treated for injuries, according to the International Red Cross.
CRISIS PUSHES UP OIL PRICES
Global oil prices were boosted by Nigeria supply fears late last week and a serious production outage would push them sharply higher, according to traders and analysts.
“All PENGASSAN branches and members at all the production platforms … (will) execute immediately the systematic shutdown of oil production should the negotiation with the government break down,” the main oil union said.
Industry officials doubt unions can stop crude oil exports completely because production is largely automated and Nigeria has crude stored in reserves, but any outage could still have a significant dampening impact on the economy.
Even with oil output remaining intact, the strikes were costing Nigeria around $600 million a day, Central Bank Governor Lamido Sanusi told Reuters.
The strikes have prevented tankers from delivering supplies to Nigeria, which, despite its oil riches, imports most of its refined petroleum products.
Motorists have been queueing at the handful of petrol stations with any fuel left in the commercial hub Lagos and capital Abuja. Black market sellers are offering small amounts at the side of the road for around 350 naira per litre.
Many economists have said the subsidies were corrupt and wasteful with billions of dollars of state funds going into the hands of a cartel of fuel importers, while giving little benefit to millions of poor Nigerians.
But the Nigerian public, who have witnessed decades of political corruption and worsening public services, view cheaper fuel as their most tangible welfare benefit.
The strikes began with gripes over subsidies but in some areas have become a fight against long-term government failures.
Nigeria sells more than $200 million in crude oil a day and holds the world’s seventh largest gas reserves. But the infrastructure is so badly managed that it only provides 160 million people with enough power to support a medium sized European city, meaning most people live without power.
The confrontation is a serious setback for Jonathan, already under fire for failing to quell an increasingly violent Islamist insurgency in the north.