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Nigeria Rolls Back Gas Price After Protests - New York Times

Written By Ivan Kolev on Tuesday, January 17, 2012 | 3:26 AM

After the announcement, Nigerian unions said they had suspended their walkout and street protests. A statement from the Nigeria Labor Congress said that union leaders had decided “that in order to save lives and in the interest of national survival, these mass actions be suspended.”

In a speech on the state-run Nigerian Television Authority, the president said the price would drop to about $2.75 a gallon, still higher than the $1.70 that Nigerians had been paying before the government eliminated subsidies on Jan. 1 in a highly unpopular decision.

The government said it was revoking the fuel subsidies to put public finances on a sounder footing, but the move prompted tens of thousands of protesters to fill the streets of Nigerian cities. The police used live ammunition to disperse protests in Kano and other places; at least three people were killed, and Amnesty International denounced what it said was excessive use of force by the authorities.

Nigerians emerged from their homes this weekend to find the fragile calculus underpinning most people’s lives in the country further threatened.

The price of onions has more than doubled because of the cost of getting them to market. Dried crawfish, hot peppers and watermelon seed are twice as expensive. Lines of cars stretched far down dingy blocks in the gray winter haze, waiting to pay about $3.50 a gallon for gasoline that cost just $1.70 on New Year’s Eve.

The standoff among the Nigerian government, the labor unions and the street continued Sunday, with vows of more strikes unless the government backed down.

At the grimy Iddo Market in Lagos, a long line of rickety open stalls under a highway overpass, the mood over the weekend was wary. Housewives bustled about the piles of yams and tomatoes for the first time in a week.

“Everything is just double, triple the price,” said Segun Nisi, shaking her head over the cost of watermelon seeds, whose oil is used in cooking here. Similar reactions boded ill for the government’s policy course.

Nigeria produces immense oil wealth, but analysts say that for decades, billions of dollars from the country’s oil earnings have been stolen by a corrupt elite while three-quarters of the country’s citizens live on about a dollar a day. Government-subsidized gasoline has been almost the only benefit from oil production to reach the wider population.

Some local commentators saw the widespread protests over fuel as the beginning of a “Nigerian Spring.” But they were another headache for a country that is already faced with an insurrection by armed Islamic militants in the north, sectarian tensions in the middle and perpetual restiveness in the oil-producing south. At Iddo, Mrs. Nisi was dressed up for shopping — a shiny white blouse, embroidered black cap — after a week of closed stores and markets. But the experience was not making her sympathetic to the government’s plan. And the seed vendor was not budging from his new price. “We are just suffering here, and the people at the top are enjoying their life,” Mrs. Nisi said. “They are just making people too crazy.”

Even the country’s oil workers threatened to strike, which could affect world energy markets if the country’s exports are crimped. One analyst said a strike lasting several weeks could push up oil prices by $10 to $20 a barrel.

At the root of the trouble is a paradox that some see as emblematic of the country’s 50 years of independence: Nigeria is one of the world’s leading crude oil exporters, but it must import nearly all of its gasoline from foreign refineries because years of neglect, mismanagement and corruption have left the country’s own refineries unable to function. The government subsidies, which approached $8 billion, made up the difference between the world market price and the lower price that Nigerians had been paying at the pump, while the middlemen who imported the gasoline made huge profits.

In a 2009 report, the International Monetary Fund called the removal of the fuel subsidy “an important first step.” But in a place where experts estimate that $50 billion to $100 billion in oil revenue has been lost through fraud and that 80 percent of the economic benefit from oil production has flowed to 1 percent of the population, the monetary fund’s approval of a step that hits ordinary people so hard looks provocative.

At Iddo, Mabel Ekewke eyed five small baskets of onions. Before, they would have cost about 1,000 nairas (about $6.25), she said; now the vendor was asking 2,500 nairas ($15.50).

Richard Berry contributed reporting from Paris.

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