Tuesday, January 17, 2012

Nigerian president yields on fuel subsidy

Financial Times
16 January 2012

By Xan Rice in Lagos

Nigeria’s trade unions called off a nationwide strike on Monday after the government cut fuel prices by nearly a third and promised to tackle corruption in the oil sector.

The move appeared to have ended a week of economic paralysis and protests that threatened the oil supplies of Africa’s biggest crude producer and questioned the government’s capacity to deliver much needed reform at a time of mounting public debt and declining foreign reserves.

The climbdown can also be seen as a blow to ­Goodluck Jonathan, president, who campaigned as a man of the people but has now alienated many supporters.

On Monday he fixed the price of petrol at 97 naira (60 US cents) a litre – it had cost 141 naira after he withdrew the subsidy on January 1. This is still substantially higher than the old price of 65 naira.

He stressed that the price cut was temporary and that the government remained committed to deregulating the downstream oil sector

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