Nigerian unions threaten strike over fuel price

ABUJA, June 4 (Reuters) Nigerian labour unions will call a strike in two weeks unless President Umaru Yar'Adua reverses an increase in the price of fuel decided by his predecessor three days before the handover of power, union leaders said today.

The unions want Yar'Adua, who took office on May 29, to reverse two other measures taken by Olusegun Obasanjo in his last days as president -- the privatisation of two oil refineries and a doubling in the rate of Value Added Tax (VAT).

''We want a dialogue with the government. We have given them a two-week ultimatum starting from today,'' said John Kolawale, secretary-general of the Trade Union Congress (TUC), an umbrella body that includes one of the two main oil workers' unions.

''If they refuse we will take appropriate industrial action and that could include a general strike which would involve the oil sector,'' said Kolawale.

Supply disruptions in Nigeria, the world's eighth-biggest exporter of crude oil, have pushed up prices on international markets. Nigeria's output is already down by about a third because of militant attacks on the oil industry.

However, previous strikes organised by the labour unions have had a limited impact on exports as companies have maintained skeleton staffing to keep the oil flowing.

Obasanjo's last-minute decision to increase the pump price of fuel by 15 per cent to 75 naira (59 US cents) per litre outraged many Nigerians, who regard cheap fuel as one of the few benefits they receive from an inefficient government.

The government argues that with international prices so high, the subsidies it pays on fuel imports to keep prices low within Nigeria are unsustainable. Despite exporting over 2 million barrels of crude per day, Nigeria has to import refined products because its refineries are not working.

Obasanjo's administration had long argued that the public sector had failed to operate the refineries and the way forward was to privatise them. It sold two of them in its dying days but the sales were controversial because both went to a consortium led by Aliko Dangote, a major financier of the ruling party.

''The deals were not transparent. The two refineries were sold to the same individuals. If they want to sell the refineries it should be a transparent process and the welfare of the workers should be discussed,'' said Kolawale.

The unions also want the government to implement a 15 percent pay rise for public sector staff announced in January. According to them, the increase has yet to be applied for most workers. They want government to pay arrears going back to January.

The government has argued that ministries and parastatals should clean up their payrolls to eliminate thousands of ghost workers before they get the extra money. Distributing salaries to ministries for non-existent civil servants has been a common channel for corruption in Nigeria.

REUTERS AE ND1728