Subsidy Strike: Oil union set to shut exports

The most strategic of Nigeria’s workers unions, the Petroleum and Natural Gas Senior staff Association of Nigeria(PENGASSAN) said its members have stopped sending the reports of crude oil production to the Federal Government and that the move was preparatory to the shut down of Nigeria’s oil export. Crude oil sales account for 95 per cent of Nigeria’s foreign exchange earnings.
In a statement today, the union said not sending oil production reports to the government is “one of the very first steps to shut down process”.
If the union shuts down oil production and export, it will strike at the jugular of the Jonathan administration that needs oil revenue to bankroll its obese appetite and its over N3 trillion recurrent expenditure. Nigeria exports about 2 million barrels daily. The shut down will also raise the stakes in the nationwide strike over fuel prices.The strike enters the fourth day Thursday, with government insisting it will not roll back the 115 per cent increase in the oil price to N65. Petrol now sells for between N141 and N150 in Nigeria.
Pengassan, the biggest oil union, said it was ready to join the mass action in Africa’s biggest crude producer, which exports more than 2m barrels a day.
“Now that the federal government has decided to be callous-minded, we hereby direct all production platforms to be on red alert in preparation for total production shutdown,” said Babatunde Ogun, Pengassan’s president.
Demonstrations had been expected, but the level of rage has surprised the government. Tens of thousands of people have joined nationwide protests that have grown each day and tapped into wider disaffection over decades of poor governance and corruption.
The strike has forced the closure of schools, shops, businesses and banks. Road transport has been curtailed and air travel has been badly hit.
Until Wednesday, neither side appeared willing to give any ground, with the government insisting that the $8bn annual subsidy was unaffordable.
The biggest recipients of Nigeria’s oil are the US, India, Brazil and the Netherlands.
The administration of President Goodluck Jonathan urged union leaders to enter into talks.
“The government is worried about the threat to shut down oil production because . . . if they go ahead to carry out their threat that action will worsen our economic problem, which the government is trying to solve,” Labaran Maku, minister of information, told Reuters news agency.
While the removal of the subsidy makes economic sense, shifting the entire burden to the population without first improving services or infrastructure, or tackling corruption, has united the poor and middle classes in anger.
A protest in Ojota, Lagos, drew more than 10,000 people on Wednesday. Demonstrators carried placards with slogans such as “Stop corruption, not the subsidy”.
“This is not just about 65 naira petrol,” said Kehinde Osibote, 47, an electrical engineer. “It’s about the state of roads and power, and the fact that there’s no cushion for the poor. We are not backing down – we must suffer to get results.”
Elsewhere in the commercial capital, youths carrying sticks and bricks blocked some of the main roads, preventing cars passing. There were reports of motorists being robbed. In Kaduna state, the local government imposed a 24-hour curfew to stop the protests.
Policing the demonstrations is a challenge, given that the government is already facing a deadly insurgency from the Boko Haram Islamist group, which has killed more than 500 people over the past year, including dozens of Christians in recent weeks.
In a video uploaded to YouTube on Wednesday, Abubakar Shekau, the group’s leader, said the sectarian killings were reprisals for the deaths of Muslims in religious and ethnic strife in the country’s middle belt.
He warned Mr Jonathan that the security forces would not be able to defeat his movement, and claimed it had significant support in mostly Muslim northern Nigeria.
Mr Jonathan said this week that Boko Haram represented a greater threat to the country than the 1967-1970 Biafra civil war.
.with reports from the Financial Times