NIGERIA’s government vowed to stick to its decision to end fuel subsidies as protests against the doubling of fuel costs mounted yesterday, with workers vowing to shut ports and oil operations in Africa’s largest crude producer.
While it was a “difficult decision”, the government would not reinstate the subsidies, Information Minister Labaran Maku said after an emergency cabinet meeting on Wednesday night. A nationwide strike from Monday called by trade unions would cause “greater harm”, he said.
The labour action “could have the potential to significantly slow oil output and disrupt much of the country’s transport”, Sebastian Boe, a political analyst at IHS Global Insight in London, said.
President Goodluck Jonathan abolished 1,2-trillion naira ($7,5bn) of subsidies on January 1, in effect doubling the cost of fuel.
He promised to use the savings to boost investment in power plants and roads. Nigeria imports more than 70% of its fuel because of a lack of refining capacity.
Mr Jonathan’s promises, including 1600 new buses to improve public transport, failed to stop the growth of protests yesterday.
“We believe the scrapping of the subsidy makes sense from a macroeconomic point of view,” Citigroup analysts in Johannesburg said.
“But politically the government needs to prove it will be able to improve service delivery if it wants popular support for the (move).”