Nigerian strike to go ahead on Wednesday

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

Unions met yesterday to consider the government offer, but issued a statement saying only a full reversal of the 10-naira rise in fuel prices could avert the action, which may cut oil supply from the world's eighth largest exporter.

The government had offered to reduce fuel prices by 5 naira per litre, among other things.

''The central working committee has decided to write formally to Mr President requesting that the federal government has up to midnight today to effect a reversal, otherwise the position of NLC (Nigeria Labour Congress) stands,'' said Abdulwahed Omar, president of the umbrella union body.

The strike threat is a major challenge to newly-inaugurated President Umaru Yar'Adua, who took office three weeks ago and has yet to name his cabinet.

He inherited the crisis from his predecessor, ex-president Olusegun Obasanjo, who introduced the surprise fuel price hike two days before leaving office.

Unions had also demanded the government cancel a doubling of value-added tax, void the privatisation of two oil refineries and back-date a public sector pay rise to Jan 1.

The government agreed to the demands on VAT and public sector pay, but suggested unions consult the privatisation agency regarding the sale of the refineries.

The government sold the two strategic plants unexpectedly to one of Obasanjo's business allies in the two weeks before he stepped down.

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 world oil prices at close to 10-month highs of around 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. The tanker drivers agreed to return to work yesterday as a goodwill gesture, but will now stop work again under the general strike order.

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 oil 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 BST0030