Monday, January 16, 2012

Oil Price Hits U.S.$115 Over Subsidy Crisis

This Day
13 January 2012

A threat by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to shut down crude oil production this weekend in protest against the removal of fuel subsidy has pushed crude oil price up more than $2 to trade at $114.70 Thursday.

The industrial action by the organised labour and other civil society coalitions has not affected crude oil production but the threat by PENGASSAN and the increasing tension was enough to send panic to the international oil market as the country ships about 2.1 million barrels of crude oil per day and is a key supplier to the United States and Europe.

PENGASSAN said it would shut down oil and gas production from Sunday, though industry officials expressed doubts that unions would be able to stop crude exports completely.

"PENGASSAN shall be forced to go ahead and apply the bitter option of ordering the systematic shutting down of oil and gas production with effect from Sunday January 15 (2300 GMT on Saturday Jan. 14), if the Federal Government of Nigeria fails to yield to the popular agitation of Nigerians on her unacceptable approach to fuel subsidy removal," PENGASSAN said.

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