Outcry in Nigeria as fuel prices more than double

[January 03, 2012]  LAGOS, Nigeria (AP) -- Irate drivers in Africa's most populous nation paid more than twice the usual price Monday after the government quietly removed a long-cherished consumer subsidy that had kept gas affordable, prompting fears of strikes and unrest.

Gas powers Nigeria's generators because the national electricity supply is sporadic at best, and fuel also keeps engines running in traffic that can snarl for hours. The government's announcement -- made over a long holiday weekend -- drew outrage.

"This New Year 'gift' by the presidency is callous, insensitive and is intended to cause anarchy in the country," said a joint statement by two unions who said they were planning general strikes and protests in the coming days. "We shall neither surrender nor retreat."

Unrest would only add to Nigeria's security woes: President Goodluck Jonathan already declared a state of emergency over the weekend in parts of the country hit by a growing Islamic insurgency that is fueled in part by widespread poverty.

And the fuel price hike is likely to result in even higher prices in the landlocked and violence-plagued north, as Nigeria's refined oil is mainly imported through ports the country's south.

Previous attempts to tamper with the subsidy over more than two decades have been met with nationwide protests, compelling even heavy-handed military governments to reduce it instead.

The labor unions also preemptively warned police and security forces "not to accept any order to shoot Nigerians or attack them for publicly resisting these evil hikes in fuel prices."

Tensions already are on the rise in the commercial capital and megacity of Lagos. At one bus stop, a conductor pushed a policeman trying to board his bus for free, saying that the hike meant that even uniformed officers would henceforth have to pay.

Many gas stations were shut down altogether on Monday, since gas station owners had only learned about the change at the same time as everyone else.

Signs at a few stations put the cost at $3.50 per gallon (94 cents per liter) -- just over double Sunday's morning price of about $1.70 per gallon (45 cents per liter).

While that's cheap by American standards, most Nigerians subsist on just $2 a day and the rising gas prices are expected to force food prices to spiral as well.

"I don't want to lose customers by doubling my rates, so I'll have to bear some of this cost myself," said Yomi Esan, 31, a driver for a taxi chain. "My biggest worry is losing my customers because this is how I feed my family."

Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the United States, but virtually all of its petroleum products are imported after years of graft, mismanagement and violence at its refineries.

The Petroleum Products Pricing Regulatory Agency announced Sunday it was stopping to pay the subsidy on fuel to petroleum importers effective immediately.

The government has said the move will save the country some $8 billion, some of which will be dedicated to much-needed infrastructure projects. Previous attempts to lift the subsidies have been met with nationwide strike actions.

An executive with a top gas station owner, who spoke on condition of anonymity because of the sensitivity of the matter, said the move would push companies to be more efficient so they can cut costs and sell at more competitive prices.

But in a country where few people see any wealth from the country's staggering oil revenues, the subsidy was a rare government benefit and one Nigerians don't want to lose.

Esan, the taxi driver who is afraid to raise his prices, is despondent about his financial future if he stays in Nigeria. He's already started immigration procedures for three other countries.

"I had been saving to buy my own car, but with this, I just want to leave this country," he said.

[Associated Press; By YINKA IBUKUN]

Associated Press writer Bashir Adigun in Abuja, Nigeria contributed to this report.

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