Removal of Fuel Subsidy Causes Mass Protests

On January 1 the Federal Government (FG) removed the long-term fuel subsidy that had been in place across the country. Many viewed the subsidy as the only tangible advantage that the average person enjoyed from the presence of petroleum. All of the country’s local refineries have fallen into disrepair, requiring that crude oil must be sent to the Middle East for refining and then shipped back at an inflated price. The subsidy allowed that fuel to still be affordable to most businesses and many individuals. Its removal caused the price of fuel to double overnight, from 65 ($.40) to 140 naira per liter in gas stations. The majority of the population purchases its fuel on the informal market however, and that price doubled from around 100 to 200 naira per liter.

The FG argued that the subsidy was not economically sustainable at current market prices, costing the government a reported $6-8 billion per year. President Goodluck Jonathan, Minister of Finance Ngozi Okonjo, and other PDP politicians promise that the funds for the subsidy will be rechanneled to help improve the roads system as well build new hospitals and schools. Most of those opposed to the removal point to the widespread political graft by that drains the state budget (an estimated $400 billion was misappropriated between 1960 and 1999). They argue that clamping down on corruption is the key to fixing the national budget, and not raising the cost of the living for the average Nigerian (the minimum wage is $110 per month). The increased price affects the cost of nearly everything, including food, transportation, and consumer goods.  It is particularly problematic in a country with severe shortages of electricity that depends primarily on generators for power.

Protests against the subsidy removal began in Lagos, Kano, Abuja, and to a lesser extent in Port Harcourt on Monday. At least 10,000 demonstrators marched through these cities with placards, chanting anti-government slogans and burning some public and private property. The protests have continued in intensity since then, with Abuja being almost completely shut down and Kano implementing a 24-hour curfew.  Also on Monday, the National Labour Congress (NLC) announced a nationwide workers’ strike in opposition to the removal of the subsidy. The strike has closed various offices and businesses in most major cities, and those that remain open have been warned by the government of the possibly of violence against working employees.

In the upcoming weeks I will be chronicling the demonstrations from the streets of Port Harcourt. Port Harcourt is the capital of Rivers State and the commercial center of the Niger Delta.

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