Nigerian strike still on despite concessions

LAGOS, June 19 (Reuters) A general strike in Africa's top oil producer looked set to go ahead as planned tomorrow after unions rejected government concessions as too little too late.

In a meeting held today, the government offered to reduce fuel prices by 5 naira per litre among other concessions to workers, whose action threatens to halt oil shipments from the world's eighth largest exporter.

Former president Olusegun Obasanjo hiked pump prices by 10 naira to 75 naira per litre on May 27, triggering a crisis two days before handing over to President Umaru Yar'Adua.

''We are insisting on a total reversal of the fuel price increase,'' said Peter Akpatason, president of the powerful NUPENG oil union, before another meeting with the government today.

The strike threat is a major challenge to Yar'Adua, who has yet to name his cabinet. His office issued a statement yesterday night saying he was aware of the hardships experienced by ordinary people.

Yesterday night's meeting, the government also agreed to revoke a doubling of value-added tax and to back-date a public sector pay rise to Jan. 1, accepting two union demands.

The unions had also demanded the government cancel the privatisation of two oil refineries.

The government said unions should seek explanations from the privatisation agency which rushed through the sales unexpectedly to one of Obasanjo's business allies in the two weeks before he stepped down.

Akpatason said unions would hold an internal meeting today afternoon to take a final decision.

''After that we will know the way forward,'' he added.

TOTAL STRIKE union leaders said the strike would be total, and would paralyse oil production and exports, although there was some uncertainty over how quickly this would happen.

Previous strikes in Nigeria have had a limited impact on oil operations, because they tend to build strength slowly and are normally resolved within a few days.

The strike call has helped to keep oil prices at close to 10-month highs of around 72 dollars a barrel.

Nigeria's government cannot survive for long without exporting oil, because it provides more than 90 per cent of the country's foreign exchange earnings.

Lengthy fuel queues have already formed outside the few service stations still selling petrol as road tanker drivers have been on strike since last Thursday. However, the tanker drivers agreed to return to work today as a goodwill gesture, local media reported.

Bus fares have tripled in Nigeria's largest city Lagos and many commuters were left stranded by a shortage of transport.

Many Nigerians support the strike because they see cheap fuel as one of the few benefits they receive from a government that has failed to deliver constant power, clean water, healthcare or decent schools.

Nigeria's four oil refineries have been shut for months because of sabotage and mismanagement, and Africa's largest producer of crude is entirely dependent on imports to meet its fuel needs.

The government originally justified the fuel price increase by pointing to rising world prices. The government says it spends billions of dollars every year on subsidies which would be better directed to social programmes.

Inured to decades of embezzlement by successive governments, few Nigerians accept that argument.

Reuters PY DB2324