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Nigeria: Main oil union threatens production shutdown

Pius Utomi Ekpei / AFP - Getty Images

Protesters carry a mock coffin of President Goodluck Jonathan reading "Rest In Pains" during a demonstration on the fourth day protest against the scrapping of oil subsidy at Gani Fawehinmi Park in Lagos on January 12.

Nigeria's main oil union said Thursday it would try to shut down the country's oil and gas production from Sunday, as part of a crippling national strike over spiraling fuel prices.

The strike began Monday after the Nigerian government reversed a two-decade-long subsidy program that had kept gas prices low for Nigerian consumers.


Anger over the government's decision has led to demonstrations across Africa's most populous nation, and related violence has left at least 10 people dead.

 

A statement Thursday by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said that if the government does not restore the subsidies, the union would have to act.

"We are hereby notifying the Federal Government of Nigeria ... that [we] 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 ... 0000 hours of Sunday Jan 15,'' the union said in a statement.

Protesters say they want a permanent change in Nigeria, a move away from leaders who send their families abroad for schooling and medical checkups while the rest subsist on less than $2 a day.

"They want to cut us off," said Anthony Abang, a 32-year-old unemployed man who helped close down a Lagos highway. "They want to kill our future."

Gas prices doubled overnight
President Goodluck Jonathan removed subsidies on Jan. 1 that had kept gasoline prices low for more than two decades. Overnight, prices at the pump more than doubled, from $1.70 per gallon to at least $3.50 per gallon. The costs of food and transportation also doubled.

Jonathan insists the move was necessary to save the country an estimated $8 billion a year, which he promises will go toward badly needed road and public projects.

But Nigerians marching through the streets in all parts of the country have seen government promises go unfulfilled before, while politicians got richer by stealing funds from planned public work projects. Many Nigerians don't even have electricity and clean drinking water.

That anger has seen some protesters confront police, set burning roadblocks and attack government offices. At least 10 people have been killed.

On Wednesday in Minna, the capital of the central Niger state, youths attacked the governor's house, forcing him to flee by helicopter. A mob also killed a police officer.

Oil prices rose above $102 a barrel on Thursday following concerns about the strike in Nigeria.

However, even if Nigerian production is slowed, oil in inventories could continue to supply foreign markets for a time.

"A complete shutdown, if carried out, is likely to have a rather large detrimental effect on Nigerian output, even though exports could continue from their inventories in the short term," financial institution Barclays Capital recently said.

Nigeria is a top supplier of crude to the U.S., producing about 2.4 million barrels a day from the swamps of its southern delta to massive offshore oil fields. Oil accounts for up to 80 percent of revenues in Nigeria, a nation of more than 160 million people.

The president insists the removing the subsidy was necessary to save the country an estimated $8 billion a year -- money which he promises will go toward badly needed road and public projects.

However, protesters distrust the government, and say it should first cut corruption in a nation where military rulers and politicians have stolen billions of dollars.

In Lagos, Nigeria's commercial capital of 15 million, several hundred protesters on Wednesday took over a major highway leading to the islands where the wealthy live. One protester carried a signed that read: "We are ready for the civil war."

Fears about violence were heightened as the leader of a radical Islamist sect challenged the authority of Nigeria's president in an online video. The video by Imam Abubakar Shekau, the leader of the sect known as Boko Haram, will aggravate religious and ethnic tensions in this nation of more than 160 million.

Attorney General Mohammed Bello Adoke has warned that the government "will not hesitate to bring to bear the full weight of the law" against violent protesters. He also said the strike by major labor unions violates a court injuction.

"Adoke also told public workers the government will implement a "no work, no pay" policy for those who join the strike. However, public workers already go weeks without pay in Nigeria at times because of corruption and mismanagement.

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Reuters, the Associated Press and msnbc.com staff contributed to this report.