NATIONAL STRIKE BEGINS SLOWLY, PICKS UP STEAM

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 001032 SIPDIS E.O. 12958: DECL: 06/08/2014 TAGS: PREL PGOV PTER PHUM EPET NI SUBJECT: NATIONAL STRIKE BEGINS SLOWLY, PICKS UP STEAM REF: A. ABUJA 1012 ¶B. LAGOS 1188 Classified By: AMBASSADOR JOHN CAMPBELL FOR REASONS 1.5 (b) AND (d). ¶1. (C) SUMMARY: The Nigerian Labour Congress' (NLC) strike to protest the latest hike in fuel prices began the day slowly June 9 but continues to pick up steam. More businesses closed as the day progressed, including businesses outside Abuja and Lagos. No major public demonstrations have been reported, and the strike remains for the most part non-violent. The Federal High Court in Abuja issued a decision at 4 PM on June 8, refusing to grant a new injunction to ban the strike but calling instead for the GON to return to a 38 Naira/l price for gasoline and the NLC not to strike per the judge's earlier decision of February 9, ¶2004. The NLC has chosen to ignore the implied ban on the strike, saying they do not trust the GON to honor its commitment. The strike seeks to feed on widespread anger among Nigerians, and the NLC, along with most civic and political groups, can be expected to milk as much political mileage from this dispute as possible. END SUMMARY. ¶2. (U) This cable is a joint product of Embassy Abuja and Consulate General Lagos. -------------- The Progress of the Strike -------------- ¶3. (SBU) The Nigerian Labour Congress' (NLC) strike (reftels) against the latest hike in fuel prices began the day slowly but continued to pick up steam in Abuja and elsewhere June 9. As expected, initial participation in the strike was stronger in Lagos than Abuja, and cautious everywhere (Ref A). NLC teams have been circulating to inform the public that the strike is on, and to encourage, or force, compliance. As the news travels, many businesses in Abuja have closed early, with banks, hotels and petroleum vendors suffering the highest rate of closures. Only about half the employees at the Nigerian Federal Secretariat reported for work on June 9, and many left early with no plans to return tomorrow. ¶4. (SBU) A heavy security presence in many locations has kept strikers off the streets in many places, but by midday businesses were closing in Makurdi, Kano, Kaduna and Katsina. One Embassy contact in Kano stated that everyone "expected the strike," although the public remained unsure about its effectiveness. "We anticipated closing down today, so there have been no surprises," he continued. The leaders of the NLC have yet to schedule any public demonstrations, so the threat of confrontation with security forces has not materialized. A group of police patrolling Abuja's central district told PolOff that they support the strike and only "hope that labor can be trusted this time." ¶5. (SBU) Confusion was the keyword in the runup to the strike, with GON talking heads claiming the strike had been canceled while the independent media were warning Nigerians to prepare for the action. The Federal High Court in Abuja issued a decision at 4 PM on June 8 refusing to grant an injunction to ban the strike but calling instead for a return to the status quo of February 9, 2004. This judgment was appealed by the GON and the appeal has yet to be decided. (NOTE: The February decision, which was a non-binding "advisory" from the same High Court, encouraged the GON to hold the petroleum price at 38 Naira per liter and urged the NLC not to engage in a strike. END NOTE.) The judge also called on the Inspector General of Police to "enforce the (February) order on both parties." ¶6. (C) The GON claims as of COB June 9 that it cannot and will not reduce the price of fuel. The NLC expressed its distrust of the GON and called for the strike to continue, claiming that any ban from the court "had yet to be served" on NLC's leadership. After the court ruling, NLC and GON negotiators met for over seven hours on the evening of June ¶8. GON officials told PolOff they had been ordered to "give nothing" to labor. One commented that the President was still worried about the State of Emergency in Plateau State and violence in many other parts of Nigeria. "He does not want any challenge to this authority to stand," the negotiator said. A labor representative said that negotiations had been futile since the GON gave nothing while "we held out for the old (38 Naira) price." -------------- International Implications -------------- ¶7. (SBU) For now, the strike has only interfered with Nigeria-internal air traffic. Some internal flights have been canceled, but movement continues. Reports from ChevronTexaco's and Mobil's upstream operating managers indicated no adverse effects from the strike on production or lifting as of early afternoon June 9. Both companies had stocked their storage facilities with fuel and supplies earlier. Although shift changes and supply runs were interrupted June 9 by canceled flights, ChevronTexaco reported lifting crude as planned by at least one tanker off Escravos. -------------- Private Marketers Consider Dropping Prices -------------- ¶8. (SBU) O.T. "Jimmy" Adelekan, Executive Director of Texaco Nigeria, told Econoff on June 9 that after a stakeholders meeting in Abuja on June 8, and in the light of the court order later that night, the marketers have generally agreed to roll back fuel prices. He said executives from Oando (formerly Unipetrol),AP, and Conoil agreed to a rollback in principle at the June 8 stakeholders' meeting. Mobil and Total, the remaining two "major marketers," did not send representatives to the meeting. ¶9. (SBU) Adelekan said early June 9 that he was then on his way to a meeting with PPPRA officials to determine a workable arrangement for fuel sales in a price-restricted regime. Adelekan said it would be likely that retailers would sell gasoline within a price band of 41-43 naira per liter (NNPC would likely sell at 38 naira at its two stations in Abuja and Lagos, the price the unions are demanding). He said the independent marketers will be able to do this only if NNPC guarantees a depot price of 33.5 naira per liter for fuel imports. -------------- What's Next? -------------- ¶10. (C) COMMENT: The NLC and its many civic and political group allies want more than anything else to re-establish their credibility with the Nigerian public. They are not yet inclined to compromise on the fuel prices, and can be expected to milk as much political mileage from this dispute as possible. The GON is not backing down either. June 10 is likely to see more strike than June 9, unless a deal is brokered during the night. CAMPBELL