LAGOS, Nigeria — Nigeria’s president said today that fuel prices will immediately drop amid a paralyzing nationwide strike.
President Goodluck Jonathan made the comments in a speech aired this morning on the state- run Nigerian Television Authority. Jonathan said fuel prices will drop to about $2.75 a gallon.
The nationwide strike began Jan. 9, paralyzing the nation of more than 160 million people. The root cause has been gasoline prices: Jonathan’s government abandoned subsidies on Jan. 1 that kept gasoline prices low, causing prices to spike from $1.70 per gallon to at least $3.50 per gallon.
The costs of food and transportation also largely doubled in a nation where most people live on less than $2 a day.
Negotiations late Sunday between the government and union officials failed to bring an end to the strike. Jonathan alleged that provocateurs could be attempting to hijack protests to make the country unstable.
Early this morning, Nigeria Labor Congress president Abdulwaheed Omar told journalists that the union would halt street protests at Jonathan’s request after the leader claimed the protests could become violent.
Anger over losing one of the few benefits that average Nigerians see from living in an oil-rich country led to demonstrations across the nation and violence that has killed at least 10 people.
Jonathan and other government officials have argued that removing the subsidies, which are estimated to cost $8 billion a year, would allow the government to spend money on greatly needed public projects.
The strike could cut into Nigeria’s oil production of about 2.4 million barrels of crude a day. The nation remains a top energy supplier to the U.S. A major oil-workers association threatened Thursday to stop all oil production but has held off.
Any perceived impact on production could cause oil futures to rise as trading begins in stock markets today. Fears of tightened global supplies could raise oil prices by $5 to $10 per barrel on futures markets in the week ahead. Gas prices would follow.
